The rupee remained buoyant against the US currency for the second day to end at 66.66, showing a rise of 9 paise on account of bouts of dollar selling by exporters and a stellar rally in local equities.
Though the overall forex sentiment remained cautious due to rising crude prices and amid concerns over fiscal balance.
The Indian currency had suffered its worst drubbing in recent past and plunged to a fresh 14-month low of 66.90 on Wednesday before staging some recovery.
In the meantime, the US dollar continued its domination against its major trading partners ahead of important US GDP release later in the day.
On the global energy front, crude prices showed some moderation but headed for a third week of gains amid supply concerns.
Brent crude, an international benchmark, was trading lower at USD 74.58 a barrel in early Asian trade.
More From This Section
The rupee resumed lower at 66.83 from Thursday's close of 66.75 at the inter-bank foreign exchange (forex) market, largely weighed down by month-end demand from banks and importers.
It made a fresh intra-day low of 66.85 in mid-morning deals before staging a smart rebound.
After reclaiming session's high of 66.65 towards the fag-end trade, the local unit finally settled down at 66.66, showing a gain of 9 paise, or 0.13 per cent.
For the week, it has depreciated by another 46 paise against the US dollar.
The RBI, meanwhile, fixed the reference rate for the dollar at 66.7801 and for the euro at 80.7438.
However, the 10-year benchmark yield edged up to 7.77 per cent from 7.76 per cent.
Meanwhile, domestic equities extended their bull run buoyed by upbeat corporate earnings with key indices reclaiming multi-month highs even as the May derivatives series got off to a strong start.
The optimism for peace in the Korean peninsula after leaders of North and South Korea held a historic meeting at the border and announced a denuclearization as a common goal contributed to a better market mood across the globe.
The forex market will be closed on Monday and Tuesday in observance of Buddha Purnima and May Day, respectively.
The dollar index, which measures the greenback's value against a basket of six major currencies, was higher at 91.71.
In the cross currency trade, the rupee surged further against the pound sterling to end at 91.82 from overnight close of 93.24 and hardened against the euro to settle at 80.54 as compared with 81.32 earlier.
The local unit also rose against the Japanese yen to finish at 60.98 per 100 yens from 61.18 yesterday.
Elsewhere, extending its downward pressure, the euro slipped to a fresh 3-month low against the greenback after the ECB left policy rates unchanged as expected and left the future of its asset purchasing program unchanged.
Key euro-zone data was mostly disappointing with German unemployment, Spanish CPI, and French GDP all fell short of expectations largely weighing on the Euro.
The pound sterling is trading weak against the US dollar after the first quarter GDP data in the UK fell short of the market expectations along with disappointing key macro releases, diminishing chances of a rate hike in near-term.
The Bank of Japan, however, kept the monetary policy unchanged as widely expected in April and abandoned the FY 2019 as the time-frame for reaching the 2 per cent inflation goal.
In forward market today, the premium for dollar edged higher owing to mild paying pressure from corporates.
The benchmark six-month forward premium payable in August moved up to 83.50-85.50 paise from 82.50-84.50 paise and the far-forward February 2019 contract also gained to 212.50-214.50 paise from 210.50-212.50 paise previously.