The RBI's payout comes at a time the government strives to tackle a nearly five-year low economic growth with lakhs of estimated job cuts across sectors, and defend its ambitious target of containing fiscal deficit at 3.3 per cent of the GDP.

Easing of concerns about the US-China trade conflict along with weakness in the dollar overseas supported the rupee, according to analysts.

US President Donald Trump said on Monday that his negotiators had received two "very good calls" from China and it was a sign that China is serious about reaching a deal and that talks would begin soon. "I think we're going to have a deal, because now we're dealing on proper terms. They understand and we understand," he said.

The dollar index - which gauges the greenback's strength against six peers, was last seen 0.08 per cent lower on Tuesday.

Rising crude oil prices and foreign fund outflows however limited the gains in the rupee. Brent crude futures - the global benchmark for crude oil - were last seen trading 1.2 per cent higher at $59.39 a barrel, after falling 1 per cent in the previous session dropping for a third day in a row.

Analysts expect some pressure to continue in the rupee over the near term.

"72.20 is an important resistance and till the time it is trading below 72.30 the trend is bearish for the rupee-dollar pair," Rahul Gupta, currency research head, Emkay Global Financial Services, told NDTV in an email response.

Foreign institutional investors (FIIs) remained net sellers in the capital market, pulling out a net Rs 923.94 crore on Tuesday, provisional data from the NSE showed.

"However, the development on US-China trade war and performance of emerging market currencies will track the movement in rupee," Mr Gupta added.