The rupee rebounded by 23 paise to close at 73.64 against the US dollar on Thursday following an improved risk appetite among investors triggered by positive global cues.
Investors globally took the US Fed statement of starting tapering as soon as November in their stride and encouraging news on China's Evergrande crisis also helped to clear some uncertainty on the global front, analysts said.
At the interbank forex market, the local unit opened flat at 73.85 against the greenback. During the session, it witnessed an intra-day high of 73.61 and finally settled at 73.64.
Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, fell 0.29 per cent to 93.19.
"The Indian rupee erased Wednesday's loss tracking cues from regional currencies and a surge in global equities after the US Federal Reserve's meeting. Globally risk is looking fairly balanced with two large events of the week FOMC and Evergrande chaos seem to be behind," said Dilip Parmar, Research Analyst, HDFC Securities.