The rupee recovered from early low levels to trade higher by 9 paise at 71.72 against the US currency in late morning trade on Friday.
The rupee for the first time in nine months breached the 72-mark against the US dollar in opening trade due to heavy losses in stock markets. The rupee opened lower at 71.93 and touched a low of 72.05 later.
A recovery in equity markets on the buzz that the government may consider relaxation to FPIs from the super-rich tax helped the local currency cut losses.
The rupee recovered to a high of 71.67 in the late morning session before quoting at 71.72 to the US dollar, showing gains of 9 paise over the last close of 71.81.
The US dollar was trading firm against its global rivals. The US dollar index measuring its strength against global peers was up 0.16 per cent.
International benchmark Brent Crude oil was also trading up by 18 cents at USD 60.10 per barrel in Singapore.
The BSE Sensex was trading down 32.88 points or 0.09 per cent at 36,440.05. The broader NSE Nifty was marginally up by 8.55 points or 0.08 per cent at 10,749.90.