The rupee pared initial losses and settled on a flat note at 82.54 (provisional) against the U.S. dollar on Thursday, supported by a rebound in domestic equities.
At the interbank foreign exchange market, the local unit opened at 82.59 against the American currency and touched a low of 82.66 and a high of 82.48 intra-day.
It finally settled at 82.54 against the greenback, unchanged from its previous close.
In the previous session on Wednesday, the rupee had appreciated 16 paise after the Reserve Bank of India (RBI) hiked the repo rate by 25 basis points.
The dollar index, which gauges the greenback's strength against a basket of six currencies, declined 0.36 per cent to 103.03.
Global oil benchmark Brent crude futures advanced 0.19 per cent to $85.25 per barrel.
"The Indian rupee depreciated against the U.S. dollar amid fund outflows and risk-averse sentiments. However, the loss was limited following the state-run banks' dollar supply following inflows from the issuance of green bonds," said Dilip Parmar, Research Analyst, HDFC Securities.
Mr. Parmar further noted that the sentiment for the local unit remains weak on the expectation of the dollar outflows from one of the big corporates for repaying debt.
In the near term, spot USD-INR has support at 82.20, the 50-day simple moving average and resistance at 82.80, the recent swing high formed on February 7, Parmar added.
On the domestic equity market front, the 30-share BSE Sensex advanced 142.43 points or 0.23 per cent to end at 60,806.22, while the broader NSE Nifty rose 21.75 points or 0.12 per cent to 17,893.45.
Foreign Institutional Investors (FIIs) were net sellers in the capital markets on Wednesday as they offloaded shares worth ₹736.82 crore, according to exchange data.