The rupee was last trading at 61.35, up 20 paise over Monday's close.

The currency had dropped marginally on Monday, after inflation data ensured that bond yields rose and the rupee fell.

The Indian currency has been one of the best performing Asian currencies in the last few weeks, thanks to a slew of measures taken by the RBI and the government.

Meanwhile, markets are expected to open higher on hopes that there would be a resolution to the debt ceiling crisis in the US.

GoodReturns.in