Sentiments were weighed down as the US dollar turned higher against its major counterparts.
At the Interbank Foreign Exchange (Forex) market, the domestic unit opened lower at 56.02 as against its previous close of 55.64 on dollar buying by importers, mainly oil refiners, to meet their month-end requirements.
This marks a turnaround after rupee's 158-paise plunge in the last three sessions.
The Indian rupee recovered by four paise to 54.99 after touching all-time low of 55.07 against the American currency in the late morning trade due to mild selling of dollars by banks following following measures taken by RBI to curb the local currency's fall.
Forex dealers said fresh dollar demand from banks and particularly, month-end demand from oil importers despite weakness of the dollar in the overseas market pulled down the rupee.
The rupee on Monday dropped by 30 paise to 54.72 against the US dollar in late morning trade, due to on fresh demand for the American currency from banks and importers despite a weak global trend.
Forex dealers said fresh dollar demand from importers also weighed on the rupee sentiment, while sustained foreign fund inflows into local stocks capped its fall to some extent.
The Indian currency has shrunk 2.92 per cent since Donald Trump's victory in the US presidential polls earlier this month.
The rupee appreciated by 37 paise to 62.12 against the dollar in early trade on Monday.
The rupee on Wednesday strengthened by another 3 paise to 62.82 against the US dollar.
The rupee shed 6 paise to hit a fresh 1-month low of 62.31 on Thursday.
The rupee had shed 10 paise to close at 66.14.
This is rupee's lowest since 62.32 on January 9.
Increased demand for the dollar from importers put pressure on the rupee.
It moved in a range of 66.9250 and 66.70 per dollar during the day
The rupee settled at 61.71. In straight three sessions, the currency has shot up 51 paise or by 0.82 per cent.
The Reserve Bank of india is likely to tell state-run United Bank of India (UBI), which has seen erosion of capital due to bad loans and higher provisioning to implement prompt corrective action.
However, firm equity markets capped the rupee losses.
On Monday, the rupee had lost 14 paise to close at 66.62 against the US dollar.
The Indian rupee on Wednesday ended unchanged against the US dollar at 61.41 ahead of the outcome of US Federal Reserve's policy meeting.
Mobile remittance services, which have done wonders in other emerging market economies like Kenya and the Philippines, are expected to change the retail payment landscape in the country that has over 600 million mobile subscribers and 300 million bank account holders.
The local currency had gained 10 paise to close at 63.51.
The rupee surged to its highest level in five weeks to end at 65.58 by gaining 38 paise against the US currency.
On Tuesday, the rupee had declined marginally by 3 paise to 66.03.
The Rupee is likely to recover during day trad, say currency watchers.
The rupee had lost 6 paise to close at 55.80 against the Greenback yesterday on persistent dollar demand amid stronger trend overseas.
The dollar was weak against major world currencies.
For the month as a whole, rupee depreciated 6.34 per cent in May.
The Indian rupee was down by 44 paise at a fresh two-year low of Rs 48.25 per United States dollar in early trade on Tuesday on persistent demand for the American currency from banks and importers on the back of dollar firmness in overseas market.
Rupee climbs further to fresh nine year high of 39.785 against the US dollar
Recovering from early losses, the rupee on Friday ended marginally higher at 64.81 against the US dollar.
The rupee on Thursday plummeted to an over three-month low of 63.32 by losing 50 paise against the US dollar.
Firm equity markets and foreign capital inflows failed to restrict rupee's fall against the dollar
The domestic currency had lost 44 paise in the previous two days.
Persistent dollar demand from banks and importers on the back of a higher dollar in the New York market mainly affected the rupee.
The rupee opened slightly higher by Rs 67.24 against Tuesday's closing level of Rs 67.26 per dollar.
The rupee fell because of fresh demand for dollar from importers.
The rupee had advanced 7 paise to end at 65.51 on Thursday.
The NSE Nifty too ended 58.60 points, or 0.54 per cent, higher at 10,967.30 after shuttling between 10,985.15 and 10,928 during the session.
The rupee firmed up by 15 paise to close at 62.36 per dollar on fresh selling by banks
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