Mumbai: Extending gains for the third day in a row, the rupee rose by 20 paise to settle at 1-1/2 week high of 67.32 a dollar on persistent dollar selling by banks and exporters amid firm equity markets.
Banks and exporters preferred to reduce their dollar position on hopes of more foreign capital inflows in view strong equity markets.
The rupee opened higher at 67.50 per dollar against the yesterday's closing level of 67.52 per dollar at the Interbank Foreign Exchange (Forex) market and firmed up further to 67.31 per dollar in the day trade.
The domestic currency closed with gains of 20 paise or 0.30 per cent at 67.32, the highest closing level since June 20 when the rupee had settled at 67.31.
The rupee ended the week with gains of nearly 1 per cent or 64 paise compared to previous week's closing level of 67.96. The dollar index was trading down by 0.18 per cent against a basket of six currencies in the late afternoon trade.
Meanwhile, RBI fixed the reference rate for the dollar at 67.4410 and euro at 74.7449.
In cross-currency trades, the rupee firmed up further against the pound sterling to finish at 89.52 from 90.87 yesterday and recovered against the euro to 74.89 from 75.19.
The domestic currency moved up further against the Japanese yen to 67.67 per 100 yens from 65.68.
The BSE Sensex rallied over 145 points to end at 8-month high of 27,145, buoyed by data that showed manufacturing activity gathered steam last month amid strong foreign capital inflows.