Early on Friday, due to foreign money inflows and a decline in crude oil prices, the rupee strengthened by 24 pesos to 82.10.
The rupee's morale was also helped by gains in the domestic stock market and a declining US dollar during early Asian trading.
The rupee increased in value at interbank foreign currency market opening at 82.12 and maintained that value throughout early activity. Early transactions saw it fluctuate between 82.16 and 82.10.
On Wednesday, the rupee decreased by 18 paise to settle at 82.34 to the dollar. Due to Ram Navami, the forex market was closed on Thursday.
FIIs have turned net buyers in Indian markets following the ebbing of the banking contagion fears. The fact that there have been no further bank failures or major stress in the system has boosted FII flows, V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services said.
The dollar index, which measures the value of the dollar relative to a basket of six different currencies, recovered from early lows to close 0.05% higher at 102.20. Early Asian trading saw a decline, reaching 102.09.
Benchmark Brent crude futures fell to USD 79.08 per barrel, a decrease of 0.24 percent.
The 30-share BSE Sensex rocketed by 680.56 points or 1.17 percent to 58,640.65 on the local equities market, while the larger NSE Nifty climbed 191.75 points or 1.12 percent to 17,272.45 points.
According to exchange data, foreign institutional investors (FIIs) changed from sellers to buyers on Wednesday, purchasing shares worth Rs 1,245.39 crore.
