Mumbai: The rupee on Tuesday rallied 63paise, recording its steepest single-day recovery in nearly two years, to settle at 86.82 against the US dollar, backed by dollar selling by banks. According to forex traders, Tuesday’s sharp gain a day after sliding closer to the 88 level shows a highly volatile currency market amid concerns over the worldwide tariff war.

At the interbank foreign exchange, the rupee opened at 87.45 against the greenback and touched the intraday high of 86.61 during the session. The unit settled at 86.82 against the dollar, registering a gain of 63paise from its previous close.