The rupee opened higher at 60.09 a dollar against last weekend's level of 60.16 at the Interbank Foreign Exchange (Forex) market.
It firmed up further to 60.00 per dollar on initial dollar selling from banks and exporters amid capital inflows into equity markets and weakness of the greenback overseas.
According to provisional data from stock exchanges, foreign institutional investors (FIIs) bought shares worth a net Rs 386.95 crore last Friday.
However, fag-end dollar demand from banks and importers pulled the domestic currency to 60.21, a marginal loss of five paise from its previous close.
Meanwhile, the benchmark BSE Sensex ended by 41.23 points higher at 22,445.12.
The dollar index was quoted lower by 0.01 per cent against the major currencies in the international market.
"The initial gains were supported by the gains in other Asian currencies against the dollar overseas," said Abhishek Goenka, Founder and CEO, India Forex Advisors.
The benchmark six-month premium payable in October settled the day at 228-230 paise from last Friday's close of 225.5-227.5 paise.
Far forward contracts maturing in April, 2015 ended at 458.5-460.5 paise against 456-458 paise previously. The Reserve Bank of India fixed the reference rate
for dollar at 60.0475 and for the euro at 83.3423.
The rupee remained weak against the pound to 101.54 from 101.49 previously while fell back against the euro to 83.53 from 83.38.
It, however, reacted downwards to 59.07 per 100 Japanese yen from last close of 58.72.
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