By Nimesh Vora

MUMBAI, Feb 27 (Reuters) - The Indian rupee mounted a recovery on the back of heavy intervention by the central bank on Thursday after a decline in Asian peers pushed it to an over two-week low.

The rupee INR=IN was quoting at 87.1875 at 12:52 p.m. IST, marginally up from 87.21 in the previous session. The slight uptick was largely thanks to intervention by the Reserve Bank of India after the currency fell to 87.4050.

The drop came on the back of a 0.6% decline on Tuesday. India's financial markets were off on Wednesday.

Several traders described the intervention to be aggressive, with state-run banks, acting on behalf of RBI, selling dollars on order-matching systems with the intent to push the dollar/rupee pair lower.

"They (the RBI) wanted to make sure that they disturbed the uptrend (on dollar/rupee pair)," a currency trader at a bank said.

It was possible that there were dollar inflows, which were caught up in the intervention, which would have exaggerated the moves in the currency, he said.

Indian equities were expected to receive inflows of about $1 billion on account of MSCI's quarterly rebalancing, which comes into effect on February 28.

ASIAN PEERS FALTER

Asian currencies struggled on the day with the offshore Chinese yuan slipping to 7.2750 to the U.S. dollar. Other Asian currencies were down 0.2% to 0.5%.

The uncertainty on what U.S. President Donald Trump will do on tariffs remains a sore point for Asian currencies.

Trump on Wednesday rekindled hopes for yet another one-month pause on new tariffs on imports from Mexico and Canada, saying they could take effect on April 2.

Earlier in the week, Trump had said tariffs on the two countries were "going forward on time and on schedule", which would have been next week.

(Reporting by Nimesh Vora; Editing by Mrigank Dhaniwala)

((nimesh.vora@tr.com))