The rupee on Thursday plunged to a nine-month low of 62.25 against the dollar but recouped losses to close the day at 61.94 on suspected selling of the US currency by state-run banks on behalf of the RBI and mild recovery in stocks.
The previous low for rupee was 62.45 intra-day on February 20, 2014.
Sustained capital inflows, although in small lots in the last couple of days, also helped the rupee to recover some lost ground but better dollar overseas capped the rupee rise, a forex dealer said.
At the Interbank Foreign Exchange (Forex) market, the domestic unit commenced lower at 62.03 a dollar from previous close of 61.96 and dipped to a nine-month low of 62.25 on strong dollar demand from oil companies.
The rupee managed to stage a recovery and settle the day at 61.94, revealing a small rise of 2 paise from its previous close, snapping the five-session losing string.
The local currency had lost 45 paise or 0.73% in last straight five sessions.
Pramit Brahmbhatt, Veracity Group CEO, said: "The rupee traded weak... made nine-months low, taking cues from weak local equities and strong dollar. It appreciated towards end due to RBI intervention through state-owned banks..."
Meanwhile, the Indian benchmark S&P BSE Sensex on Thursday snapped its two day losses and closed moderately higher by 34.71 points or 0.12%.
FPIs/FIIs bought shares worth USD 36.95 million on Wednesday, as per Sebi data.
The dollar index was up by 0.10% against its major global rivals.
The benchmark six-month premium payable in April ended at 205-207 paise as against 208-210 paise previously.
Forward contracts maturing in October, 2015, closed at 426.5-428.5 as against 429-431 paise on Wednesday.
The Reserve Bank of India fixed the reference rate for dollar at 62.10 and for the Euro at 77.91.
The rupee recovered slightly against the pound to 97.10 and recouped to 77.64 per euro.
It, however, remained firm to close at 52.46 per 100 Japanese yen from 52.68.