The rupee wiped off its early losses and was trading marginally strong at 61.86 against the dollar at 4.17 pm local time on mild dollar selling by exporters and banks.
After opening flat at 61.88 against the previous close of 61.89, the domestic unit hovered in the range of 61.84 and 61.95 in the afternoon trade.
The RBI kept the benchmark rates unchanged in the policy announcement yesterday but said it could cut the benchmark rates early next year provided inflationary pressures do not reappear and the Centre controls the fiscal deficit.
Forex dealers said apart from the gains in the dollar against other currencies in the global markets on impressive US data, fresh demand for the American unit from importers weighed on the rupee in early trade.
The rupee had gained 15 paise to close at 61.89 against the dollar in yesterday’s trade due to selling of the US currency by exporters and banks even as domestic markets ended lower.