The rupee fell further to close sharply lower at 56.39 on the back of month-end demand for the American currency from oil importers.
The Indian unit has been on a declining trend for the most of May and has depreciated about five per cent in the May.
The rupee resumed slightly higher at 56.15 per dollar from the previous close of 56.17 at the Interbank Foreign Exchange (Forex) Market and firmed up further to 56.04 in intraday trade.
Further, worsening current account deficit concerns has put downward pressure on the Indian unit.
Currency markets will open on Friday after the US would have released gross domestic product (GDP) numbers later today. Markets will look at this closely as the GDP data and the home sales data will give indication of the Federal Reserve's asset purchase programme.
Also, on the domestic front, the Indian government will put out the fourth quarter GDP numbers. This will likely have an impact on the Indian market.
Call rates, G-secs end lower
The interbank call money rates closed lower at 6.75 per cent from its previous close at 7.35 per cent.
The 8.15 per cent government security (G-Sec), which matures in 2022, closed at Rs 104.60 from previous close of Rs 104.94. Yields hardened to 7.44 per cent from the previous close of 7.38 per cent.