The rupee appreciated 7 paise to settle at 83.30 (provisional) against the US dollar on Friday, following positive cues from equity markets and strong domestic macroeconomic data.
Forex analysts said easing crude oil prices in the international markets also favoured the local currency.
Global crude price retreated from the level of USD 84 to USD 80 per barrel as oil-producing countries' grouping OPEC+ agreed not to reduce output in 2024, they added.
At the interbank foreign exchange, the rupee opened stronger at 83.29 against the dollar and traded between the peak of 83.25 and the lowest level of 83.36 against the American currency intra-day.
It finally settled at 83.30 (provisional) against the greenback, registering a gain of 7 paise over the previous close.
The rupee settled 5 paise lower at 83.37 against the dollar on Thursday.
Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was trading 0.19 per cent lower at 103.30 on Friday.
Global oil benchmark Brent crude futures declined 0.23 per cent to USD 80.67 per barrel.
On the domestic equity market front, Sensex surged 492.75 points, or 0.74 per cent, to settle at 67,481.19 points. The Nifty advanced 134.75 points, or 0.67 per cent, to 20,267.90 points.
A monthly survey on Friday said India's manufacturing sector continued with its robust performance in November. The seasonally adjusted S&P Global India Manufacturing Purchasing Managers' Index (PMI) rose to 56 last month from the eight-month low of 55.5 recorded in October.
Foreign institutional investors were net buyers in the capital market on Thursday as they purchased shares worth Rs 8,147.85 crore, according to exchange data.
According to the government data released on Thursday, India's gross domestic product (GDP) growth of 7.6 per cent during July-September beat most estimates, including 6.5 per cent projected by the Reserve Bank of India (RBI), retaining the country's tag of the world's fastest-growing major economy.
Also, another data released simultaneously showed that the output of eight key infrastructure sectors jumped 12.1 per cent in October 2023 against 0.7 per cent expansion in the year-ago period.
The government's fiscal deficit at the end of October touched 45 per cent of the full-year budget estimate, as per the data released by the Controller General of Accounts (CGA).