MUMBAI, June 20 Reuters The Indian rupee declined on Tuesday, weighed by likely dollar outflows and a weaker Chinese currency, traders said.

The rupee was quoted at 8.1425 to the dollar by 1106 a.m. IST, compared with 81.9350 in the previous session. The domestic unit opened at 82.03.

The price action since the open suggests that there is definitely an outflow, a spot trader at a public sector bank said. Yes, the yuan is down, but that can39;t possibly be enough to take it USDINR here.

The trader was unable to pin down what the outflow was for.

A forex sales person at a private bank said that it like looked all were on the buying side on USDINR, and cited importer hedging and potential squaring of positions.

The offshore Chinese yuan dropped below 7.18 to the dollar, pulling most other Asian currencies lower. Analysts cited lack of policy actions to stabilize growth of the economy among reasons for the weakness in the Chinese currency.

China cut its loan prime rates LPR on Tuesday, the first such reduction in 10 months, with authorities seeking to shore up a stuttering economic recovery.

The LPR cuts were well anticipated; market awaits a stimulus package to support a bottoming out in CNY rates, OCBC Treasury said in a note.

The dollar index managed to push higher to 102.62 on the back of the weaker offshore yuan. The fall in Asian shares and U.S. equity futures provided another reason to buy the greenback.

The dollar awaits U.S. Federal Reserve Chair39;s…