India's rupee strengthened to a two-month high as the Reserve Bank of India intervened in currency markets, supported by record foreign-exchange reserves. The rupee gained as much as 0.4% on Tuesday to 94.7988 per dollar, reaching its strongest level since July 1.

The central bank intervened in both offshore and onshore markets right from the start of the session at 9 a.m. Mumbai time, according to traders familiar with the developments. The RBI's dollar sales helped prop up the local currency amid its record foreign-exchange reserves.

The intervention marks a proactive stance by the Reserve Bank of India to manage currency volatility. Traders noted the central bank's presence was evident from the market open, signaling strong intent to defend the rupee at current levels.

India's foreign-exchange reserves have climbed to all-time highs, providing the central bank with ample ammunition to smooth excessive currency fluctuations. The rupee's advance reflects both the RBI's direct intervention and improved market sentiment toward emerging Asian currencies.