The Indian rupee declined to its weakest level in over two months on Tuesday, hit by outflows from local equities, while traders turned their focus to the Reserve ‌Bank of India's monetary policy decision on Wednesday where a hike is widely anticipated. Dollar sales from state-run banks, most likely on behalf of the RBI, helped limit the rupee's fall. The currency ended the session at 96.42, down 0.1% from its previous close. The central bank also likely conducted dollar-rupee sell/buy ?swaps to drain excess rupee liquidity from the banking system, traders said. It has been conducting such FX swaps, open market bond sales and reverse repo transactions to absorb excess cash in the weeks leading up to Wednesday's policy decision. Swap markets have priced in a modest possibility of a larger-than-expected 50-basis-point rate increase. A rate hike would aid the rupee by raising the cost of betting against the currency at a time when short positions on it have ?remained firm due to lingering energy supply risks from conflict in the Middle East. The pound eased against the euro on Tuesday as French bonds rallied from the previous session's fall that helped propel sterling to an almost three-month high. The euro fell sharply on Monday as investors worried ‌that a dramatic fall in French bonds due to concerns about public debt and a looming election was spreading to other markets such as Italy. The euro was last up 0.1% at 84.88 pence after hitting an ?almost three-month low of 84.61 pence on Monday following seven straight sessions of declines. Sterling was around 0.1% higher against the dollar at $1.322. Gold ticked up on Tuesday, supported by a pause in the US Treasury yield's rally and a weaker dollar, ‌while investors awaited the minutes of the Federal Reserve's September meeting for fresh clues on its monetary policy outlook. Spot gold rose 0.6% to $4,163.16 per ounce by 12:22 p.m. EDT (1622 GMT). US gold futures for December delivery added 0.8% to $4,191. Among other metals, silver rose 0.5% to $61.32, while platinum slid 1% to $1,703.40 and palladium fell 0.2% to $1,170.55.