USD/INR Closed at 72.19 against its open at 71.84. Dollar ended down Friday on selling by foreign banks tracking weak trading in greenback amid optimism over reports of likely payments in rupee terms for Iranian oil.
Also, treasury officials said that the Reserve bank of India may come up with NRI dollar scheme soon.
"Foreign banks sold dollars since morning trades with dollar index trading down. Also, news of India planning to pay Iran oil payments with rupee weighed on the pair.
On Thursday, reports showed India will settle payments for Iranian oil using rupee through local banks starting in November as US sanctions will make it difficult to settle trades through European banks, two industry sources said.
Also, on Thursday, the Finance Ministry pegged the exchange rate for dollar at Rs 73.65 for calculation of import duty with effect from September 21, as against Rs 72.55 a fortnight ago.
The greenback slipped to a three-month low against its major currencies as safe haven demand fell after investors' view that the Sino-US trade conflict would be less damaging to global growth than initially feared.
Investors took a less bearish view on the impact of the US-China trade war on markets than earlier viewed. Tariff imposed by the US and China on each other was set at lower levels than expected.
Sensex provisionally ends 221 points lower with 17 components in the red.