The rupee recovered from 15-month lows hit earlier on Thursday, as dollar buying by oil importing companies ebbed and traders said the local unit also got a lift from the US currency's drop overseas against major currencies.
The partially convertible rupee ended at 46.2450/2500 per dollar, off the day's low of 46.35 and barely changed from the previous close of 46.235/245. The rupee at Thursday's close was just 0.17 percent shy from Monday's 46.32/33 - the lowest finish since early September 2004.
"Strong dollar demand from a state-run oil company saw the rupee fall in early deals," said a trader at a foreign bank. "Once that went through, the rupee recovered as the majors gained some ground against the dollar."
The dollar slipped to a one-week low against the yen and lost ground against the euro on Thursday, as investors locked in profits on the greenback's rally in 2005.
The yen received support after Bank of Japan Governor Toshihiko Fukui said chances of a monetary policy shift will increase next year.
Traders expect the rupee to stay under pressure ahead of the $5.5 billion redemption of the India Millennium Deposits later this month and on concerns that high prices of oil, India's biggest import, will widen the trade deficit and lead to more demand for dollars.
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