The rupee appreciated by 34 paise to close at 81.86 (provisional) against the US currency on Friday, supported by a rebound in domestic equities and easing crude oil prices.
The local unit began trading at 82.15 versus the dollar on the interbank foreign exchange market and ended the day at 81.86, gaining 34 paise from its previous finish of 82.20.
The rupee's value versus the dollar reached a low of 82.31 during the trading session.
The dollar index, which measures the strength of the dollar against a basket of six different currencies, fell 0.12% to 101.63.
Brent crude futures, the benchmark for all crude oil, increased 0.39 percent to USD 82.49 per barrel.
The 30-share BSE Sensex gained 909.64 points or 1.52% to close at 60,841.88 on the domestic equities market, while the larger NSE Nifty gained 243.65 points or 1.38 percent to close at 17,854.05.
According to exchange data, Foreign Institutional Investors (FIIs) sold shares worth Rs 3,065.35 crore on Thursday, making them net sellers in the capital market.
With inputs from Agencies.
