Indian rupee traded mixed and extended its consolidation near 63 levels before ending the day almost flat.
India's HSBC January Manufacturing PMI came at 51.4 versus 50.7 (MoM) and is at its highest level since March 2013.
Domestic equity markets corrected by close to one and a half percent before Nifty ended the day at 6001.8 levels with a loss of 87.7 points.
RBI will cut the ceiling on its swap windows for 3-5 year foreign currency non-resident deposits FCNR-(B) by 100 basis points from March 1 and the new rates will be LIBOR/Swap plus 300 basis points, down from LIBOR/Swap plus 400 bps earlier.
The dollar index recorded its best monthly gain in eight months in January as worries about capital flight from emerging economies also kept investors at arm’s length from risk assets, underpinning the yen over growth-sensitive, high-yielding currencies.
Germany is preparing another bailout; the third - for Greece, worth between €10bn and €20bn.
Eurozone PMI Manufacturing rose to 54.0 points in January, from 52.7 points in December.