The rupee, which has fallen more than 8 percent this year, has pushed up prices of imported items such as petroleum products, commodities, electronics and engineering equipment, creating a headache for Prime Minister Narendra Modi ahead of a general election due early next year. The rupee has been on the downslide since the beginning of this year and has slipped around 9% in 2018.
The Indian rupee briefly fell to an all-time low of 70.1 per USA dollar in Tuesday trade.
Nervous investors were keeping an eye on developments in Ankara after yesterday's bloodletting that saw the lira hit record lows against the dollar and euro, and equity markets go into freefall on concerns Turkey's financial crisis could spread globally.
Attributing the fall in rupee value against the USA dollar to "external factors", economic affairs secretary Subhash Chandra Garg said on Tuesday that there is nothing to worry about as long as the depreciation is in line with other currencies.
"There is no point spending a lot of dollars in defending a rupee when the force of the fall is so strong across emerging markets", said a senior forex dealer at an Indian state-run bank.
The intervention aided the rupee stabilise just a tad below 70 to a Dollars at 69.98 around 11.05 a.m. There is "nothing at this stage to worry".
Reports suggest heavy sell-off in global currencies, including Turkish lira, fuelled demand for safe-haven assets and caused the rupee to nosedive.
Turkey's lira remained under pressure in Asian trade today but markets in the region enjoyed a little more stability after the previous day's turmoil.
On Monday, the rupee had sunk to 69.93, plunging by Rs 1.08 amid fears that the crisis in Turkey could manifest into a global financial crisis.