The rupee strengthened by 9 paise to close at 73.24 against the US dollar on Thursday, supported by positive domestic equities and weak American currency.
At the interbank forex market, the rupee traded in a narrow range. It opened at 73.29 against the American currency and gained further ground to finally settle at 73.24, up 9 paise from its previous close of 73.33.
This is the second consecutive session of gain for the rupee.
During the session, the domestic unit witnessed an intra-day high of 73.22 and a low of 73.35 against the US dollar.
Traders said investors are cautious ahead of the RBI Monetary Policy Committee (MPC) decision on Friday.
The newly-constituted MPC of the Reserve Bank began its three-day deliberations on Wednesday. The decision of the rate-setting panel will be announced on October 9.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, fell 0.05 per cent to 93.57.
On the domestic equity market front, the 30-share BSE benchmark Sensex was trading 435.66 points higher at 40,314.61, and the broader NSE Nifty rose 120.85 points to 11,859.70.
Foreign institutional investors were net buyers in the capital market as they purchased shares worth Rs 1,093.81 crore on Wednesday, according to exchange data.
Brent crude futures, the global oil benchmark, rose 0.88 per cent to USD 42.36 per barrel.