The rupee recovered from its over two-year low of 66.89 in late morning deals, but was still down by 17 paise to 66.74 on persistent bouts of month-end dollar demand from importers and banks.

Earlier, the domestic currency opened lower by 66.66 as against Thursday's closing level of 66.57 at the Interbank Foreign Exchange market.

It depreciated further to hit over two-year low to 66.89 (the rupee was at 67.08 on September 2, 2013), before bouts of dollar selling from banks helped to cap its losses, it was quoting 66.74 at 1030 hours.

The rupee was hovering in a range of 66.65 and 66.89 in morning trade.

Overseas, the dollar was almost flat against the basket currencies in early thin Asian trade, with overnight US markets shut for the Thanksgiving Day holiday.