The Indian rupee ended steady on Friday, but sentiment was upbeat on hopes that foreign investment inflows into an economy that expanded nearly nine percent in the fiscal third quarter would improve.
The rupee ended at 45.2525/2600 per dollar, steady from Thursday's close of 45.2550/2650.
"There were good trade remittances which balanced out the possible outflows by some foreign funds," said a trader at a foreign bank.
"But underlying sentiment for the rupee remains strong as foreigners are expected to continue investing."
Traders said a nearly three percent fall in the key Bombay index on Thursday might have prompted some foreign funds to pare positions.
The key index fell 2.85 percent to 5,855.10 points, its lowest close in two weeks, and ended flat on Friday.
Foreign fund inflows have been a key driver of the rupee's gains against the dollar in the past year.