A sharp fall in the dollar overseas and continued capital inflows also boosted the rupee.
The dollar index, which tracks the performance of the US currency against six major global rivals, was down 0.62 per cent.
The rupee's rise was the most since December 16 and helped the local currency complete its second weekly gain in a row.
At the interbank foreign exchange market, the rupee opened strong at 61.97 a dollar from the previous close of 62.16.
It fell to a low of 62.16 on month-end dollar demand from importers, mainly oil refiners.
The rupee bounced back to a high of 61.8325 on firm local stocks and dollar sales by exporters and some banks before ending at 61.85, a rise of 31 paise or 0.50
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