Then, the script changed. The rupee has recovered by almost 9% since then and is now among the best performing currencies in the world.
"Rajan infused positivity in the market, which was till then filled with too much of negativity," said Sugandha Sachdeva, currency analyst, Religare Securities. "However, the rupee also got support from the delay in the US tapering calendar and steps taken by the finance ministry," she added.
"There were co-ordinated efforts from the new governor and the government that helped the rupee," said NS Venkatesh, head of treasury, IDBI Bank. "We expect the rupee to be stable in the coming days and it should trade in 59-61 range in the short term," he said.
The rupee closed at 61.83 against dollar on Monday. After the Brazilian real, it is the second best performing currency in the world.
However, experts said the Fed's decision regarding tapering is an important factor going forward and that the government would have to announce more reforms to boost growth for the rupee.