The Indian rupee appreciated 11 paise to close at 94.65 against the US dollar on Wednesday, reversing the previous session's losses.
The move was driven by a sharp decline in global crude oil prices and supportive sentiment from domestic equity markets.
Brent crude, the global benchmark, traded lower during the session, easing import cost pressures for India.
The drop in energy prices provided immediate relief to the currency, which had weakened to 94.74 on Tuesday amid a firmer greenback.
Positive flows into Indian equities further bolstered demand for the rupee, helping it stabilize near the 94.65 level.
This daily gain contributes to a stronger weekly performance for the rupee, which reached 94.32 per dollar last week.