The rupee gained 12 paise to settle at 72.75 (provisional) against the US dollar on Friday ahead of the release of key macro-economic data amid sustained foreign capital inflows.
At the interbank forex market, the local unit opened at 72.79 against the greenback and witnessed an intra-day high of 72.75 and a low of 72.83.
It finally ended at 72.75 against the American currency, registering a rise of 12 paise from its previous close.
On Thursday, the rupee had finished at 72.87.
Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, advanced 0.20 per cent to 90.60.
"Indian Rupee gained strength amid softening of crude oil prices and steady FII inflows. Additionally, expectation of improved macro-economic data supported Rupee," said Saif Mukadam, Research Analyst, Sharekhan by BNP Paribas.
Market participants will be keeping an eye on inflation and industrial production numbers and better-than-estimate numbers could extend gains for the currency, forex traders said.
"India CPI data is likely to show that inflation eased and remained under RBI target range of 2-6 per cent in January 2020. However, sharp gains were prevented on strong Dollar. Rupee may trade in the range of 72.50 to 73.20 in next couple of sessions," Mukadam added.