Surrendering some of its early gains, the rupee was trading higher by 45 paise to 59.44 in the late morning deals on dollar selling by banks after the Reserve Bank announced a slew of measures to arrest the local currency's fall against the Greenback.
The RBI announced measures to curb the rupee's decline by tightening liquidity and making it costlier for banks to access funds from the central bank.
The rupee resumed higher at 59.20 per dollar as against the Monday's closing level of 59.89 per dollar at the Interbank Foreign Exchange (Forex) Market.
However, it trimmed its initial gains and was quoted at 59.44 per dollar on some dollar demand from banks and importers on the back of higher dollar in overseas market.
It moved in a range of 59.20-59.47 per dollar during the morning deals.
In New York, the US dollar climbed yesterday as investors looked past weaker-than-expected retail-sales data to Federal Reserve Chairman Ben Bernanke's testimony later in the week.
Meanwhile, the BSE benchmark Sensex dropped by 285.60 points, or 1.43 per cent, to 19,748.88 at 1050hrs.