A weak dollar overseas also aided the rupee rise, while sustained capital outflows restricted the surge, a forex dealer said.
At the Interbank Foreign Exchange (Forex) market, the local currency commenced higher at 60.10 a dollar from last close of 60.14.
It improved further to 60.06 before ending at 60.08, a rise of six paise or 0.10 per cent from last close.
The dollar index, a gauge of other global major rivals, was down by 0.04 per cent.
Meanwhile, The benchmark BSE Sensex today moved up by 37.25 points. FIIs pulled out Rs 601.89 crore yesterday, as per provisional data with stock exchanges.
Pramit Brahmbhatt, Veracity Group CEO, said today not much movement was seen in the USD-INR pair. The pair is likely to trade range bound as investors are trading cautiously and are waiting for the Budget, he added.
In New York market, the dollar fell against the pound yesterday after the Bank of England took steps to strengthen rules on mortgage lending. It also extended losses against the yen after US economic data.
The benchmark six-month premium payable in November moved to 215.5-217.5 paise from yesterday's close of 213-215 paise. Far-forward contracts maturing in May, 2015 ended at 467.5-469.5 paise against 457-459 paise previously.
The Reserve Bank of India fixed the reference rate for dollar at 60.09 and for the euro at 81.88.
The rupee rebounded to end at 102.29 against the pound from 102.36 previously and recovered to 81.80 per euro from 81.84.
It, however, remained weak to 59.31 per 100 Japanese yen from 59.11.