The rupee ended higher by 28 paise at 61.42 against the US currency on Friday on fresh selling of dollars by banks and exporters on persistent foreign capital inflows into the equity market.
Banks and exporters preferred to reduce their dollar position on hopes of further capital inflows as foreign portfolio investors infused USD 107.22 million on Thursday as per the Sebi's record.
The rupee opened higher at 61.45 per dollar as against the last closing level of 61.70 per dollar at the Interbank Foreign Exchange (Forex) market and hovered in a range of 61.3650 and 61.6050 during the day.
It closed at 61.42 per dollar, showing a gain of 28 paise - of 0.45%.
The benchmark BSE Sensex rose further by 272.82 or 0.94% to end at 29,278.84 on sustained buying in view of the European Central Bank's decision to keep interest rates unchanged and announcement of a bigger-than-expected stimulus programme.
The dollar index was up by 0.82% against a basket of six major global rivals.
In the global market, the euro fell to the lowest in more than 11 years versus the dollar.