"It was a volatile day with spot rupee opening low and getting bid from there. It touched an intra-day low at 45.96 but due to some foreign banks selling, the spot rupee came off," said a dealer with a private sector bank.
"The spot rupee closed at 45.86, after climbing to 45.83," he added.
During the day some nationalised banks including the State Bank of India (SBI) were seen offloading dollars.
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Demand prevailed throughout the day with some selling happening during the later half due to a report emanating from a foreign agency quoting an RBI official that the interest rates and bank rates will remain unchanged and a review of the Exchange Earners' Foreign Currency (EEFC) account will still be pending for a few more days.
RBI's reference rate for the rupee was 45.89 on August 25 as against 45.92 on August 24.
The spot rupee is expected to remain around 45.78-46.10, but with "an expectation of it crossing the 46-mark."
"The spot rupee is expected to remain in a very tight range during the coming week and should open firm on Monday," said a dealer with a foreign bank.
Forward premiums opened on a biddish note and came off towards the day's close.
"Forward premiums remained quiet despite the spot volatility but the short-term forwards saw some changes. But at the end forward contracts closed relatively unchanged," said a dealer with a private sector bank.
The six-month annualised closed at 5.30 per cent, up from 5.48 per cent. The one-year annualised closed at 4.70 per cent from 4.50 per cent yesterday.
In the coming week forward premiums are expected to remain bid while tracking the spot rupee. "If the spot rupee behaves, forwards should come off by 5-7 paise on the near-term and about 10-15 paise on the far-term," said a dealer with a foreign bank.