Aggressive intervention from the Reserve Bank of India (RBI) saw the rupee weathering the US tariff storm on Tuesday and posting its biggest gains in nearly two years. The domestic currency settled above the 87-level at 86.83 against the dollar, an 85-paise gain over the last close.

The reversal comes a day after the domestic unit came close to touching the 88-mark which also led to the central bank intervention through state-run banks.

Forex dealers confirmed that dollar sales on behalf of the RBI were seen on both the days with some estimates pegging it at $4 billion.

At the inter-bank foreign exchange market, the rupee opened at 87.45 against the greenback and touched the intra-day high of 86.65 during the session. It later settled at 86.83.

Ritesh Bhansali, director at Mecklai Financial Services, told the Telegraph the rupee appreciated due to heavy RBI intervention. This was followed by banks unwinding long dollar position thereby triggering a further fall in the dollar’s value.

However, other Asian currencies were largely at the same level as Monday.

``I don’t see this appreciation lasting’’, Bhansali added while pointing out that the rupee could at best gain to 86.20-86.30 levels whereas it could again dip to 87.50-88 levels in the coming days.