Rupee gained 14 paise to close at 95.33 per US dollar.
Weak dollar and softer crude supported the Indian currency.
FII outflows and West Asia tensions capped further gains.
The rupee rose 14 paise to settle at 95.33 (provisional) against the US dollar on Friday as the greenback weakened and crude oil prices eased despite intensifying tensions in West Asia.
FII outflows and uncertainties over fresh tensions in West Asia weighed on the local unit while positive sentiment in the domestic equity markets provided support, according to forex traders.
The US launched fresh airstrikes against Iran on early Thursday, and Tehran responded by targeting US-allied West Asian countries in an exchange of fire that threatened an interim deal intended to help end the war.
1 June 2026
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Back-and-forth attacks, including a day earlier, have repeatedly threatened the ceasefire. But Thursday's attacks appeared bigger all around, with sirens sounding at least three times in Bahrain, home to the US Navy's 5th Fleet headquarters, and missiles targeting Kuwait and Qatar.
At the interbank foreign exchange market, the rupee opened at 95.27 against the greenback and traded in the range of 95.22 to 95.42 before eventually settling at 95.33 (provisional), up 14 paise from its previous close.
The Indian currency appreciated by just 1 paisa to close at 95.47 against the US dollar on Thursday.
"The rupee fell to 95.42 this afternoon after gaining to 95.22 in the morning on a lower dollar index. However, buying by oil companies and importers kept the dollar up... Improved risk appetite and expectations of continued foreign portfolio inflows provided support to the rupee," Anil Kumar Bhansali, Head of Treasury and Executive Director, Finrex Treasury Advisors LLP, said.
The dollar index, which gauges the greenback's strength against a basket of six currencies, was trading at 100.86, down 0.04 per cent.
Brent crude, the global oil benchmark, was trading lower by 0.62 per cent at $75.83 per barrel in futures trade.
On the domestic equity market front, Sensex jumped 827.57 points, or 1.08 per cent, to settle at 77,569.39 while the Nifty surged 244.10 points, or 1.02 per cent, to close at 24,206.90.
Foreign institutional investors offloaded equities worth ₹532.86 crore on a net basis on Thursday, according to exchange data.
