The rupee recovered from its lowest level and gained 9 paise to trade at 91.90 against the American currency in early deals on Friday, supported by lower crude oil prices in the international market.
According to forex traders, a sharp recovery in the Indian currency was capped by a strong greenback and withdrawal of foreign funds from domestic equity markets.
At the interbank foreign exchange, the rupee opened at 91.89 and strengthened up to 91.87 against the greenback before trading at 91.90 in initial deals, up 9 paisa from its previous closing level.
The rupee ended on a flat note at its lowest level of 91.99 against the dollar on Thursday.
On January 23, the currency hit an all-time intraday low of 92 against the US dollar.
Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was trading 0.36 per cent higher at 96.48.
Analysts said the dollar index strengthened after the US Federal Reserve kept the interest rate unchanged at the conclusion of its first policy decision of 2026.
Brent crude, the global oil benchmark, was trading 1.50 per cent lower at USD 69.62 per barrel in futures trade.
On the domestic equity market front, Sensex declined 520.07 points or 0.63 per cent to 82,046.30 in early trade, while Nifty dropped 157.65 points or 0.62 per cent to 25,261.25.
Foreign institutional investors sold equities worth Rs 393.97 crore on Thursday, according to exchange data.
According to the Economic Survey, tabled in parliament on Thursday, the rupee is "punching below its weight" and "investor reluctance to commit funds to India warrants examination at a time when inflation is under control and the growth outlook is favourable".
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