The rupee recovered to 53.71/72 from a one-month low of 53.82 earlier in the session. State-run banks sold dollars after the steep rise in the pair in early trade.
The Indian currency closed at 53.41/42 to the greenback on Thursday.
Large dollar flows were seen with a private sector bank, which added to the downward pressure on the pair, traders also said.
Some speculation of a potential intervention by the Reserve Bank of India hit markets, but the rumours were given little credence by traders.
On the day, rupee remains lower on the back of losses in domestic shares and tracking other Asian currencies.
Traders expect a band of 53.40 to 53.90 to hold for the rest of the session.
Copyright: Thomson Reuters
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