The rupee on Friday gained 10 paise to close at 71.14 against the US dollar on heavy foreign capital inflows after growing expectations that the Federal Reserve would keep interest rate on hold this year.
A strengthening dollar ahead of the US-China trade talks and surging crude oil prices, however, restricted the rupee gains.
Foreign portfolio investors pumped in a huge Rs 6,311.01 crore into capital markets Friday, provisional exchange data showed.
Analysts said that weak US economic data propped up expectations that the US Fed would keep the rate steady this year. The Fed minutes this week had also called for patience over tightening of rates in view of slowing global economic growth.