The rupee was off its record low on Tuesday as the dollar paused for breath from its rampant ascent even as risks point to a volatile session after the last few days of market mayhem.
Bloomberg quoted the rupee last at 81.4588, after opening slightly stronger at 81.4875, compared to its record low of 81.6612 hit on Monday.
According to Sriram Iyer, Senior Research Analyst at Reliance Securities, the rupee appreciated against the greenback as the dollar took a breather, reported PTI.
According to experts, focus will now shift to RBI's meeting this week, with its decision due on Friday.
"Most Asian and emerging market peers have started mixed, but a positive start in the equity futures could aid sentiments. The dollar index was marginally weaker, while the Euro, Sterling and the Yen strengthened against the greenback in this Tuesday morning trade," Mr Iyer told PTI.
PTI reported that the domestic currency gained 22 paise to 81.45 against the US dollar in early trade.
"The rupee touched a new low of 81.65 and is a tad bit lower from another psychological mark of 82.00. Today, the pair is likely to open slightly stronger around 81.40 levels and shall trade in a range of 81.20-82.00 levels," said Amit Pabari, Managing Director of CR Forex Advisors.
"Unlike the previous episodes of solid intervention, this time the RBI seems to shy away unwantedly amid the current liquidity crunch," he added, referring to the central bank's success in keeping the domestic currency under 80 per dollar for nearly 50 days.
The dollar index dipped 0.1 per cent, easing off a two-decade peak hit in the previous session.
Analysts, though, said the prevailing upside risk to inflation and, hence, monetary policy tightening, still remains a key obstacle.