Snapping four days of losing streak, the rupee on Friday recovered by 19 paise to close at 61.15 against the dollar in tune with local equities.
Forex dealers said late selling of US currency by exporters and some banks helped the domestic unit to rise.
At the Interbank Foreign Exchange (Forex) market, the domestic currency resumed lower at 61.46 a dollar from last close of 61.34 and declined further to a low of 61.62 --level not seen since August 8, 2014 when it had touched an intra-day low of 61.74.
Forex dealers attributed fall in the rupee value to continued dollar demand from importers, mainly oil refiners to meet their month-end needs as also weakness in local stocks.
Later, fag-end dollar selling by exporters and some banks and recovery in domestic equities pulled it back to a high of 61.00 before concluding at 61.15, revealing a rise of 19 paise or 0.31%.
In last four sessions, it had plunged by 53 paise, or 0.87%.
Meanwhile, the BSE benchmark Sensex on Friday bounced back as S&P upgraded India's credit ratings and settled up by 157.96 points or 0.60%.
FII/FPI pulled out Rs 1333.64 crore out of the domestic markets on Friday, as per provisional data with exchanges.
The dollar index was up by 0.14% against its six major global rivals. "Today rupee traded volatile, in the first half it traded weak taking cues from strong dollar but in the second half local equities which opened on a weak note then recovered and closed in green as global rating agency upgraded India's credit outlook from negative to stable. This helped rupee to gain and appreciate," Pramit Brahmbhatt, Veracity Group CEO, said.