The rupee gained 45 paise to close at 79.24 (provisional) against the US dollar on Friday as heavy buying in domestic equities and weakness in the greenback bolstered investor sentiment.
Besides, fresh foreign capital inflows also supported the domestic unit, forex dealers said.
At the interbank foreign exchange market, the domestic currency opened strong at 79.55 per dollar. It hovered in a range of 79.56 to 79.17 during the session.
The domestic unit finally settled at 79.24 against the greenback, a gain of 45 paise over its last close.
In the previous session, the rupee appreciated 22 paise to close at 79.69 against the US dollar.
The dollar index, which measures the greenback's strength against a basket of six currencies, slipped 0.21 per cent to 106.13.
Foreign institutional investors turned net buyers in the capital markets as they picked up shares worth ₹1,637.69 crore on Thursday, as per exchange data.
Brent crude futures, the global oil benchmark, rose 2.28 per cent to $109.58 per barrel.