The rupee has depreciated around 15% against the dollar so far this year The rupee moved 50 paise higher against the dollar to close at 73.45 on Thursday.
That marked its biggest single-day jump since October 12, when the currency had risen by 55 paise.
Selling of the greenback by exporters amid easing crude oil prices and upbeat economic data supported the rupee on Thursday.
The recovery in the rupee after easing of concerns over the rift between the Centre and the central bank, and improvement in India's position in the World Bank's annual 'ease of doing business' ranking.