Foreign institutional investors pumped in nearly $60 million (Rs 321.26 crore) into local equities, according to BSE provisional data.
Besides selling of dollars by exporters, strength in other currencies against the American unit overseas also supported the rupee.
Forex dealers said Euro's weakness against the dollar overseas also put pressure on the rupee.
At the Interbank Foreign Exchange market, the local unit commenced strong at 54.40, which was also to be the day's high, as against previous close of 54.57.
The rupee had closed flat at 54.85 against the US dollar in Tuesday's trade amid RBI keeping key rates unchanged in the mid-quarter policy review.
The rupee on Thursday plunged by a whopping 130 paise to hit life-time low of 60 against the US dollar in early trade on the Interbank Foreign Exchange on strong demand for the American currency from banks and importers
The rupee on Wednesday dropped by 73 paise to 61.20 in the late morning deals on persistent month-end dollar demand from importers on the back of strengthening in the US currency overseas.
Forex dealers said euro's gain against the US dollar supported the rupee, but month-end dollar demand from oil importers and a weak opening in the equity market restricted the gains.
The rupee had strengthened by eight paise to close at 60.13 a dollar on Thursday, following firm local equities and fresh currency sales by exporters.
Finance Minister P Chidambaram in an interview to PTI on Monday said, 'sentiment will turn in favour' of the rupee as government is 'committed to containing the fiscal deficit' within target and is addressing how to finance CAD.
Forex dealers said besides dollar gaining against other currencies in the global markets, a lower opening in the domestic equity market also, influenced the rupee.
The dollar index was up by 0.10 per cent against a basket of six major global rivals, ahead of a slew of data that could offer more evidence on whether an economic recovery is under way in the US.
Rupee had last ended at 54.81-level a dollar on April 5.
The dollar index was last trading up by 0.04 per cent against a basket of six major global rivals.
In International market, the US dollar fell further in early trade on Monday, losing further steam in the wake of Friday's weaker-than-expected economic-growth number and caution ahead of what is expected to be a busy week of data and monetary-policy decisions.
The local currency, which had plunged to an all-time low of 55.39 on Tuesday, crashed to 55.82 at the Interbank Foreign Exchange market in early trade.
Snapping a five-day downward march, the BSE benchmark Sensex on Wednesday shot up by 187.97 points to 18,414.45.
Foreign institutional investors sold domestic shares worth USD 8.36 million (Rs 45.41 crore), according to provisional BSE data.
The rupee on Thursday recovered by a hefty 60 paise to 53.24 against the US dollar in early trade on the Interbank Foreign Exchange market after the Reserve Bank tightened norms for utilisation of the foreign currency fixed deposit funds to check outflow of forex.
Foreign institutional investors had pumped in $132.5 million (Rs 717.89 crore), according to provisional BSE data.
The dollar index recovered its early losses and was trading up by 0.11 per cent against a basket of six major rivals.
The rupee had lost 23 paise to end at 54.09 in Tuesday's trade due to month-end dollar demand.
Forex dealers said euro's gains against the American currency in the overseas market also supported the rupee.
Strength in dollar against some other currencies overseas weighed on the rupee
Sustained foreign funds did manage to arrest the fall to some extent.
Forex dealers said sustained foreign fund flows also aided the trading sentiment in rupee's favour.
Weak dollar in the overseas market also boosted the rupee value against the dollar, a forex dealer said.
A higher opening in the domestic equity market and the strengthening of euro and yen against the dollar overseas also aided the rupee, dealers said.
Forex dealers said sustained selling of the American currency by exporters and bullish local equity markets buoyed the rupee sentiment.
Besides, a higher opening in the domestic equity market and strengthening of euro and yen against the American currency overseas supported the rupee, forex dealers said.
The rupee also recovered against the pound sterling to 87.01 from overnight close of 87.20 and also recouped losses against the euro to 69.66 from 69.84.
Sustained dollar sales by exporters and banks and a higher opening in the equity market also boosted the rupee sentiment, forex dealers said.
Dealers said besides increased dollar selling by exporters, a higher opening in domestic equity market and yen's gain against the American currency overseas helped the rupee to recover.
Nifty futures traded in Singapore were trading down 0.8 percent in line with other emerging Asian markets.
Weak domestic shares and foreign institutional investors' selling about 39 billion rupees of index futures in the last four trading sessions weighed on the rupee, dealers said.
At the Interbank Foreign Exchange market, the domestic currency commenced weak at 55.68 a dollar from Monday's close of 55.57 against the dollar.
Fresh demand for the American unit from importers put pressure on the rupee.
At the Interbank Foreign Exchange market, rupee opened weak at 55.57 from last Friday's close of 55.50.
Forex dealers said a higher opening in the domestic equity market also supported the rupee.
Falling for the first time in three days, the rupee washed out initial gains to end four paise lower at 62.57 today on caution ahead of US non-farm payrolls data and sustained capital outflows from Indian markets.
© 2026 Rediff.com - Investor Information - Advertise with us - Disclaimer - Privacy Policy - Sitemap - Feedback - About us - Terms of use - Grievances