The rupee was seen trading at 54.48/49 against dollar after hitting a 54.45, its highest since March 1, in early deals on Friday.
On Thursday the currency had closed at 54.56/57 against dollar.
The euro rallied on Thursday, posting its largest one-day gain in two months against the dollar, as European Central Bank president Mario Draghi gave no indication that the bank would cut interest rates further in the euro zone.
The government is due selling a 12.5 per cent stake in state-run Rashtriya Chemicals and Fertilizers through an offer for sale to raise about $57 million.
Dollar inflows are expected towards the stake-sale in the firm, traders said.
The rupee/dollar pair was seen moving in a 54.40 to 54.70 range initially in the session.
Copyright @ Thomson Reuters 2013
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