Rupee forwards were active, with two-week forwards closing at 153.10/25 per dollar, compared with Wednesday's close of 153.40/50.

"We see some inflows from stock market-related transaction. Local banks are selling dollars," said a currency dealer who requested anonymity.

The island nation has received dollar inflows since the beginning of April, with foreign investors buying equities and government securities.

Foreign investors have bought equities worth a net 10.42 billion in the last 20 straight sessions, taking the year-to-date net foreign inflow into equities to 12.9 billion rupees. They net bought 697.5 million rupees worth equities on Thursday.

They also net bought government securities worth 1.87 billion rupees in the week ended April 12. However, they have net sold 62 billion rupees worth of government bonds so far this year.

The market has not been impacted much after the central bank increased policy rates by 25 basis points last month, dealers said.