The rupee recovered its early losses to end flat on Wednesday, helped by robust foreign fund flows into India's flourishing stock market.
The rupee finished at 45.23/25 per dollar, off a morning low of 45.42 and steady from Tuesday's close. The unit had ended at a two-month high of 45.035/045 on Monday.
"We saw some good stock-related inflows and a major construction firm also sold dollars. There was also paring of long dollar positions by inter-bank which put an upward pressure on the rupee," said a dealer at a private bank.
Latest data from the capital market regulator showed foreign funds bought a net $70.4 million of Indian shares on Tuesday, taking their total to more than $1.7 billion so far this month. In overseas trade, the euro rose on Wednesday after eurozone central bank sources said the European Central Bank was likely to raise interest rates at least twice in 2006. The euro rose as far as $1.1911 but eased to $1.1870 by 1255 GMT.