The partially convertible rupee closed at 61.75/76 per dollar, its highest since January 21. It had closed Wednesday at 61.98/99. Financial markets were closed on Thursday for a holiday.
The rupee rose 1.5 percent on the month, its biggest monthly gain since October, after foreign investors bought a net $2.05 billion in debt and stocks in February.
But worries in emerging markets are starting to crop up again, after a tumbling Chinese yuan cast a shadow in the region, while political tensions in Ukraine also raised concerns.
Trading next week will be dominated by October-December economic growth data which is negative in nature , with the rupee expected to hold in a 61.50 to 62.20 range next week unless there are any major surprises.The PMI data is due to be announced too.
There were inflows through the day today with exporters also selling alongside the bunched-up flows. The dollar's broad weakness also added to the positive sentiment in the second half
For the week, the unit rose 0.6 percent.
The rupee opened weaker on the back of global cues and month-end dollar demand from importers including oil firms, but exporters and foreign banks stepped in to sell the greenback at higher levels.
Later, the euro rose to its highest level against the dollar this year after euro zone inflation came in above expectations, easing pressure on the European Central Bank to loosen monetary policy next week.
In the offshore non-deliverable forwards, the one-month contract was at 62.17 while the three-month was at 62.95.