The rupee appreciated by 62 paise to close at 80.78 (provisional) against the US dollar on Friday, as moderating US CPI data coupled with a fall in the dollar index boosted investor sentiments.
Forex traders said positive domestic equities and sustained foreign fund inflows also supported the local unit.
At the interbank foreign exchange market, the local unit opened at 80.76 and touched an intra-day high of 80.58 and a low of 80.99 against the greenback.
The local unit finally settled at 80.78, registering a rise of 62 paise over its previous close of 81.40.
"The Indian rupee appreciated on weak US Dollar and positive domestic markets. Sustained FII inflows also supported Rupee," said Anuj Choudhary - Research Analyst at Sharekhan by BNP Paribas.