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The Indian rupee was down slightly against the U.S dollar on Wednesday, with losses capped by the measured response of Indian equities to the selloff on Wall Street and speculative interest, traders said.

The rupee was trading at 81.9525 to the dollar by 11:00 a.m. IST, slightly below 81.9125 in the previous session. The local currency had opened at around 81.99.

Losses in India Asian equities were measured, following the overnight selloff on Wall Street. The Nifty 50 Index was little changed while shares in South Korea, China and Australia were down only about 0.1% to 0.3%.

Rupee is managing to keep its head above 82, thanks to how India and rest of Asian equities are doing and to overall dollar selling interest around the 82-level, a spot trader at private sector bank said.

"It could be that rupee actually manages to inch up later in today's session."

Worries over the U.S. banking sector resurfaced, after First Republic Bank shares nosedived to a record low after the bank disclosed a $100 billion plunge in deposits. A source told Reuters the bank is considering asset sales.

This drove demand for safe havens like U.S. bonds and the dollar. The 2-year U.S. bond yield dropped more than 20 basis points overnight, falling back below 4%.

"Events at First Republic Bank highlighted that beneath the recent calm, there could still be banking sector stresses," ANZ Research said in a daily note to clients.

The rupee forward premiums rose, tracking the overnight fall in U.S. yields. The 1-year implied yield at 2.35%, up four basis points from the previous session.