The rupee recovered from initial losses and settled at the overnight closing level of 62.07 against the dollar on Thursday after a late bout of sales by exporters as the US currency weakened overseas.
Fresh capital inflows after three days of outflows and a late recovery in local equities also helped the rupee.
At the interbank foreign exchange market, the local currency resumed lower at 62.22 a dollar from the previous close of 62.07 and declined to a low of 62.24 as domestic equities declined.
It rebounded to a high of 61.9650 on late dollar selling by exporters before ending at 62.07. Yesterday, it had gained 23 paise to a one-week high.
The benchmark 30-share S&P BSE Sensex fell 16.01 points on Thursday. Overseas investors bought a net 27.07 million of shares yesterday, as per Sebi data.
"The rupee recovered and closed flat as the dollar index, which measures the greenback against a basket of six major rivals, traded weak after strengthening for two consecutive days," said Pramit Brahmbhatt, CEO of Alpari Financial Services (India). "Now the local investors are eyeing the release of key inflation data next week."
Forward dollar premiums closed sharply lower on continued receipts by exporters.
The benchmark six-month forward dollar premium payable in June dipped to 235-1/2 to 237-1/2 paise from 242-244 paise previously and far-forward contracts maturing in December tumbled to 472-474 paise from 481-483 paise.
The RBI fixed the reference rate for the dollar at 62.1810 and for the euro at 84.4960.
The rupee fell to 102.15 against the pound from the previous close of 101.88 and turned negative to end at 84.45 per euro from 84.33. It improved to 59.15 per 100 Japanese yen from 59.26.