MUMBAI, Jan 15 Reuters The Indian rupee rebounded on Wednesday, after falling to a lifetime low in the prior session, to log its best day in over seven months, aided by a softer greenback and strong dollar sales by foreign banks.

The rupee closed at 86.3625 against the U.S. dollar, up 0.3 on Wednesday, its best singleday percentage rise since June 3, 2024.

The currency had declined to an alltime low of 86.6475 in the previous session. It recovered on Wednesday, helped by the dollar index39;s retreat from a more than twoyear peak and dollar sales by at least two large foreign banks, likely on behalf of custodial clients, traders said.

Despite the day39;s gains, the rupee has weakened about 3 since Donald Trump39;s victory in the U.S. Presidential elections in November, which sent the dollar soaring, while concerns about India39;s slowing growth also added pressure on the local unit.

In light of the currency39;s sharp decline, some analysts are pushing back expectations for interest rate cuts by the Reserve Bank of India as a weaker currency fans worries about inflation.

The central bank is also expected to use its foreign exchange reserves more judiciously as it looks to quell market volatility amid persistent headwinds, Reuters reported on Tuesday.

On the day, though, the rupee found some breathing room as the dollar index dipped to 109, while Asian currencies were mostly rangebound ahead of a closely watched U.S. consumer inflation report.

Economists polled by…