The Reserve Bank of India likely sold dollars via state-run banks to prevent the rupee from falling below the 83-per-U.S. dollar level, traders told Reuters.
The rupee was trading at 82.88, off the day's low of 82.94 and against the previous session's close of 82.7375. On the interbank order matching system, rupee fell to a low of 82.9950.
The rupee slid from near 82.89 to 82.99 before state-run banks sold dollar, likely for the Reserve Bank of India, three traders who did not want to be identified told Reuters.
The way the rupee recovered from 83 and the offers from state-run banks point to the RBI, said a trader at a private sector bank.
The dollar's jump against its peers was blamed for the rupee's decline. The dollar index jumped almost 1% to 104.60.