Forex dealers said besides dollar's gains against other currencies overseas, increased demand from oil importers for the US currency put pressure on the rupee.
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The rupee has also been bolstered by inflows into equities and debt this month, despite concerns about the withdrawal of the U.S. Federal Reserve's monetary stimulus and China's economy.
The dollar's gains against other currencies overseas and a lower opening in the domestic equity market also put pressure on the local unit, forex dealers said.
The rupee had retreated four paise from its 11-month high levels to close at 58.63 against the dollar on Tuesday on fresh demand for the US currency from importers, amid some profit- booking in stocks.
The rupee had depreciated by 39 paise, logging its biggest daily loss in nearly two months, to end at 61.34 on Thursday on fears of capital outflows from emerging markets after Federal Reserve signalled a sooner-than-expected hike in US benchmark interest rates.
In Singapore, oil prices eased in Asian trade today on a mixed US inventory report indicating tepid demand, while expectations of a return of Libyan supplies also weighed, analysts said.
India is due to post industrial output later in the day, with analysts expecting a return to modest growth, and is due to post wholesale and consumer prices data next week amid expectations vegetable prices have eased.
The concessional swap windows have attracted about $25 billion, RBI deputy governor HR Khan said on Monday.
The domestic currency resumed higher at 62.30 per dollar as against the last closing level of 62.41 at the Interbank Foreign Exchange Market and firmed up further to 62.20 a dollar.
Forex dealers said besides increased dollar selling by exporters, strength in other currencies against the American currency overseas also supported the rupee but a lower opening of the domestic equity market capped the gains.
The rupee had gained 40 paise to close at an eight-month high of 59.91 against the dollar on Friday.
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The gains in the rupee masked a rising sense of caution across markets ahead of the results of elections in several states. Delhi was the latest to hold assembly elections on Wednesday.
The rupee resumed lower at 61.15 per dollar as against the last weekend's level of 61.07 at the Interbank Foreign Exchange market and hovered in the range of 61.15 and 61.28 before quoting at 61.24 per dollar at 1030 hours.
Forex dealers said besides selling of the American currency by exporters and banks, gains in other Asian currencies against the dollar and a higher opening in the domestic stock market also supported the rupee.
Whether the rupee can regain that momentum will largely depend on foreign investors, who have been net buyers of more than $2 billion in shares over the previous 20 sessions and of $2.3 billion in bonds in March.
In New York, the dollar edged down against the yen for the first time in three sessions as investors weighed economic data and remarks from outgoing Federal Reserve Chairman Ben Bernanke.
The rupee had surged 37 paise to end at a nine-month high of 59.68 against the dollar on Tuesday. Forex market remained closed on Wednesday for 'Buddha Purnima'.
The rupee had revisited the near 2-month low of 60.55 per dollar earlier in the session.
The Indian rupee slumped to a record low near 69 to the dollar on Wednesday on growing worries that foreign investors will continue to sell out of a country facing stiff economic challenges and volatile global markets.
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