The Reserve Bank of India was seen selling dollars via state-run banks, starting at around 63.85 levels, to pull the rupee off record lows, five dealers told Reuters.
The rupee was last at 63.56/58 to the dollar, off its low of 64.13 seen early in session.
Bond yields also came off with the recovery in the rupee.
The 10-year yield was last at 9.27 per cent, up 4 basis points on the day, tracking the rupee recovery.
It rose to 9.48 per cent in session.