The rupee rallied 77 paise to end at 70.69 against the US dollar on Thursday, in lock-step with softening crude oil prices and foreign capital inflows.
This is the seventh straight session of gains for the domestic unit amid the US dollar weakening against some currencies overseas. In the last seven trading sessions, the rupee has gained a healthy 220 paise.
Traders said increased selling of the greenback by exporters and banks also supported the rupee.
At the Interbank Foreign Exchange (forex) market, the rupee opened on a firm note at 71.12 and hit a high of 70.68 following dollar selling by exporters.
The local unit, however, pared the initial gains and finally finished at 70.69, up 77 paise.
The rupee had gained 21 paise to end at 71.46 against the US dollar Tuesday. The forex market remained shut on Wednesday on account of Eid-e-Milad.
Globally, Brent crude, the international oil benchmark, was trading 0.39 per cent lower at $62.85 per barrel on Thursday amid concerns about a global glut.
Meanwhile, foreign funds poured in Rs 4.4624 billion into the capital markets on a net basis on Thursday, while domestic institutional investors also net bought shares worth Rs 496.8 million, provisional data showed.
The Financial Benchmark India Private Ltd (FBIL) set the reference rate for the rupee/dollar at 71.1787 and for rupee/euro at 81.1883. The reference rate for rupee/British pound was fixed at 91.0423 and for rupee/100 Japanese yen at 62.97.
The BSE Sensex ended lower for the third straight session on Thursday by falling over 218.78 points, or 0.62 per cent at 34,981.02. The NSE Nifty shed 73.30 points, or 0.69 per cent, to close at 10,526.75.