The rupee recovered 8 paise to settle at 79.91 (provisional) against the US currency on Friday, tracking heavy buying in domestic equities and weakness in the greenback overseas.
Besides, fresh foreign capital inflows also supported the local unit, forex dealers said.
At the interbank foreign exchange market, the local currency opened at 79.95 and witnessed an intra-day high of 79.82 and a low of 79.96 against the US dollar in the day trade.
The local unit finally settled at 79.91 a dollar, up 8 paise over its previous close.
In the previous session, the rupee had settled at a record low of 79.99 against the US dollar.
The dollar index, which gauges the greenback's strength against a basket of six currencies, was trading 0.10 per cent lower at 108.43.
Brent crude futures, the global oil benchmark, rose by 0.67 per cent to USD 99.76 per barrel.
On the domestic equity market front, the BSE Sensex ended 344.63 points or 0.65 per cent higher at 53,760.78, while the broader NSE Nifty advanced 110.55 points or 0.69 per cent to 16,049.20.
Foreign institutional investors turned net buyers in the capital market on Thursday, as they bought shares worth Rs 309 crore, as per exchange data.