The Financial Benchmarks India private limited (FBIL), meanwhile, fixed the reference rate for the dollar at 71.8129 and for the euro at 83.977
The rupee, on Friday. surged by another 34 paise to close at a one-week high of 71.84 against the US dollar on positive macro data and hopes of policy intervention by the government to defend the volatile currency.
Extending gains for a second session, the domestic unit hit a session high of 71.53 in early trade.
Sustained dollar selling by exporters and banks along with the greenback's weakness against other major Asian and emerging market currencies, in turn keeping the buoyant tone intact.
Rupee also benefitted from the massive dollar re-pricing in the aftermath of the weak US inflation report, discounting the chances of Fed hiking rates four times this year.
A combination of positive macro-related developments after the country's industrial production grew at 6.6 percent in July and retail inflation cooled to a 10-month low of 3.69 percent in August, strengthened the rupee sentiment.
Earlier today, official data showed WPI-based inflation eased to a four-month low of 4.53 percent in August.
India's benchmark ten-year sovereign yield softened to 8.12 percent.
The rupee got a shot in the arm after the government said all steps will be taken to ensure the domestic currency does not depreciate to "unreasonable levels", amid reports that Prime Minister Narendra Modi will take stock of the economic situation over the weekend.
The rupee had rebounded from an all-time low of 72.92 to end up a strong 51 paise to end at 72.18 to the dollar in the previous session Wednesday.
The domestic currency has been sliding against the US dollar since August, depreciating over 6 per cent since then as oil prices rebounded and trade tensions revved up.
The 'feel good' factor in the economy and the relative political stability alongside government's continued commitments towards strong governance amid relatively low inflation rates largely shielded Indian currency from any big drag, a forex dealer commented.
Emerging market currencies also showed some sign of stability as investors sighed with relief after Turkey's central bank hiked its policy rate to 24 per cent to restore confidence in the lira.
Meanwhile, crude prices clawed back some of its losses after suffering the largest daily drop in a month as concerns about oil supply are countering worries that emerging market crises and trade disputes could dent demand.
Benchmark Brent crude is trading at USD 78.25 a barrel in early Asian trade.
Extending its recovery momentum, the rupee opened with a strong 48 paise gain at 71.70 at the inter-bank foreign exchange (forex) market.
It powered ahead to hit a high of 71.53 in mid-morning deals but erased strong gains towards the fag-end trade amid sudden dollar demand coming from large corporates.
It finally closed the day with gains of 34 paise or 0.47 percent at 71.84, the highest level since 7 September when it closed at 71.73.
The local unit has recovered 85 paise in the last two days.
The Financial Benchmarks India private limited (FBIL), meanwhile, fixed the reference rate for the dollar at 71.8129 and for the euro at 83.977.
In the cross-currency trade, the rupee also hardened against the Japanese yen to close at 64.22 per 100 yen from 64.74.
However, it fell back against the British Pound to end at 94.26 per pound as compared to 93.76 and also drifted against the euro to settle at 84.02 from 83.58 earlier.
In the forward market, the premium for dollar edged lower due to sustained receiving from exporters.
The benchmark six-month forward premium payable in January 2019 eased to 120.50-122.50 paise from 122.75-124.75 paise and the far-forward July contract softened to 278-280 paise from 279.75-281.75 paise.
On the global front, the greenback took a hit overnight on weaker-than-expected US inflation data amid signs of reduced trade tensions between the US and China.
Against a basket of other currencies, the dollar index is higher at 94.64.Elsewhere, the British pound was trading up near six-week high against the greenback while the euro climbed to hit a two-week high.