After plunging to all-time low of 57.37 in the previous session, rupee gained a hefty 65 paise to trade at 56.50 against the dollar at the Interbank Foreign Exchange market.
Forex dealers said besides dollar selling by some banks, a strong opening in the equity market amid hopes that the Reserve Bank may announce a series of measures to check free-fall in the rupee supported the domestic unit.
The Reserve Bank on Friday had directed state-owned oil firms to buy half of their dollar requirement for oil imports from a single public sector bank.
The rupee on Friday fell to all-time low of 57.37 intra-day against dollar on intense demand for the US currency, particularly from oil importers, but ended at 57.15, recording this year's biggest fall of 85 paise in a day.
Meanwhile, the 30-share BSE Sensex rose by 122.91 points, or 0.72 per cent, to 17,095.42.