At the Interbank Foreign Exchange (Forex) market, the local unit resumed strong at 61.37 a dollar from previous close of 61.49.
It later moved in a wide range of 61.21 and 61.55 before finishing at 61.22, showing a rise of 27 paise or 0.44%. This is its best single session gain since 38 paise rise on July 2.
On Wednesday, the rupee had slumped by 65 paise, or 1.07%, to end at five-month low as dollar demand weighed.
Pramit Brahmbhatt, CEO, Veracity Group said: "Rupee ended strong and posted its third daily gain in four days. Rupee was mainly supported by the RBI intervention through state run banks which tried to heal the wounded rupee."
The trading range for the spot dollar/rupee pair is expected to be within 60.80 to 61.80, he added.
The dollar index was marginally up against its major global rivals ahead of the outcome of a European Central Bank meeting and weekly jobless claims data.
"The rupee has traded poorly in recent days. The onshore spot rate has shifted back to its highest level since early March. And if the cracks in broader risk appetite become larger, the pressure on the INR to weaken will intensify. Once again this would put the spotlight on FX policy," said HSBC Global Research in a report.