The rupee held on its sharp gains from earlier in the day, even as the dollar reversed losses and edged higher and crude prices nudged up but remained below $90 per barrel after a sharp plunge in the previous session.
Bloomberg showed the rupee was at 79.7175 per dollar, compared to its previous close of 79.9037, after opening at 79.6687.
PTI reported that the rupee rebounded by 24 paise to close provisionally at 79.71 against the US dollar.
At the interbank forex market, the local unit opened at 79.72 against the greenback, witnessing an intra-day high of 79.65 and a low of 79.83 during the session, according to PTI.
The rupee had opened stronger supported by a fall in oil prices and a recovery in most Asian currencies against the dollar.
But the domestic currency pared some gains weighed down by dollar demand from importers and oil companies.
"Importers are taking advantage of the dip (in USD/INR pair) and there has been persistent demand from oil refiners," Anil Bhansali, head of treasury at Finrex Treasury Advisors, told Reuters.
Mumbai-based Mecklai Financial is advising importers to hedge whenever the net hedge rate (spot +forwards) is available below 80. At a spot rate near to 79.70, importers can buy forward hedges below the 80 level up to October-end, according to a Reuters report.