The rupee continued its winning streak for the fifth day running, hitting as low as 71.57 against the American greenback.
The Indian tender eventually closed on 71.67 to end at a 10-week high in a welcome positive run after being battered by rising US inflation and soaring oil prices over the last few months.
At its worst, the rupee lost about 14 percent of its value against the US dollar making it the worst performing currency in Asia at the time.
But some breathing space was found in recent weeks as the price of oil slowly pulled back, following announcements of a cut back in production planning for next year.
The US Federal Reserve also helped emerging economies of late after sparking a modestly lower US dollar by expressing caution over the global growth outlook.
Subjects thought to have been discussed at the RBI meeting today include ease rules for weaker banks and thrashing a new capital framework for the Reserve Bank of India, according to moneycontrol.com.
According to Piyush Goyal, Minister of Railways in India, the meeting between RBI board of directors ran today without friction between the government and bank.
When asked if confrontation had occurred over the bank’s responsibilities towards India, Mr Goyal was quoted by The Economic Times India as saying: “We are not seeing any tension between government and the RBI.
“Only Congress chief Rahul Gandhi and you people are showing the signs of tension.”
He added: “The government has already clarified that it has not asked for even a single rupee from RBI’s reserve fund.”
The RBI shocked financial analysts as it went against predictions by holding interest rates at the start of last month.
Its monetary policy committee (MPC) left the repo rate unchanged at 6.50 percent, with five out of six panel members voting to hold the rate.
Defending the decision, the bank said it was acting “to further strengthen domestic macroeconomic fundamentals”.
The Indian inflation rate, which includes food and energy prices, dropped sharply in October and remains below the bank’s medium-term target of 4 percent for a third straight month.
Latest data showed inflation in India dropped in October to 3.31 percent on a year-on-year basis, marking the slowest pace in 13 months.