Dealers attributed the rupee's fall to increased demand for the US currency from importers.
The rupee extended gains for the second straight session against the US currency by firming up 21 paise to close at 64.82 a dollar.
Dollar weakness was a major contributor to the rupee recovery as the skittish investors continued to lighten their long positions.
The local currency recovered some ground after the Reserve Bank of India (RBI) was said to have stepped in through state-run banks, helping the rupee to end at 64.30, a fall of 110 paise or 1.74 per cent.
The domestic currency had gained by 80 paise, or 1.19 per cent, in previous five trading days.
The rupee has depreciated by about 25 per cent in the past three months, from close to Rs 83 in mid-May, while it was even higher at about Rs 80 against the British Pound in March.
The rupee recovered 14 paise to 66.40 against the dollar in early trade on Monday.
The US currency's decline against major world currencies alongside fag-end dollar supply largely helped the rupee recoup some of its initial losses
A weakening dollar against other currencies overseas supported the rupee.
In the global market, the US dollar index, which tracks the greenback against a basket of six major rivals, was up by 0.33 per cent.
The domestic currency has already dropped 44 paise, or 0.67 per cent, in the previous two sessions.
Healthy demand for the American unit from importers and corporate weighed on the rupee
A massive outflows of foreign funds on the back of stricter participatory notes and renewed possibility of Fed lifting US interest rates largely impacted the domestic unit.
The domestic currency had last touched 65-level and ended at 65.24 on September 6, 2013. It moved in a range of 64.63 and 65.23 during the day.
However, FII outflows of Rs 545 crore (Rs 5.45 billion) capped the gains in the rupee, which had slumped by 126 paise in past two days.
The Indian rupee resumed sharply lower at 66.65 per dollar against last Friday's level of 66.48.
RBI fixed the reference rate for the dollar at 66.2930 and euro at 74.8978.
The local currency had lost 119 paise in the past five sessions on rising worries over current account gap and fears that withdrawal of US stimulus will hit inflows from overseas.
Increased demand for the dollar from importers affected the value of the rupee
In worldwide trade, the US dollar continued its highly bullish trend against all major emerging market currencies
The domestic currency tumbled by 45 paise or 0.68 per cent in two days.
The dollar maintained its bullish momentum in Asian and early European trade
The rupee has dropped by 21 paise or 0.32 per cent in the last two sessions.
Forex dealers said dollar's weakness against other currencies overseas supported the rupee.
Sluggish domestic equities and persistent capital outflows largely pressurised the Indian unit
Continuing its range-bound movement for the fourth session, the rupee today closed up by two paise at 59.25 ahead of industrial output and retail inflation data.
Robust capital inflows alongside a slightly weaker greenback too reinforced the dominance of the home currency
The domestic currency has gained 9 paise or 0.13 per cent in two days.
The dollar's weakness against some currencies overseas limited the rupee's fall.
The rupee slipped from its initial gains by 5 paise against the US currency to 67.89 in late morning deals on bouts of dollar demand from importers.
India's current account deficit narrowed sharply to just $300 million
The rupee had dropped by 60 paise or 0.89 per cent in previous three trading days.
The rupee continued to rule firm against the dollar for the second consecutive day.
The rupee had recovered from its 29-month lows by rising 39 paise to close at 67.63 on Friday.
The rupee ended lower by 7 paise to 62.31 against the American currency on fresh dollar demand from banks.
The rupee snapped its two-day winning run against the dollar.
Consistent capital inflows and a recovery in local equities helped the local unit to trim initial losses
Unwinding of long dollar positions ahead of the US job data backed the rupee sentiment
The rupee briefly touched 66.78 in late afternoon trade due to stray dollar buying by some banks.
Extending losses for the second straight day, the rupee declined by 11 paise to close at more than 3-week low of 66.93 against the US dollar.
