The partially convertible rupee finished at 45.0825/0925 per dollar, off an intra-day high of 45.01 and below the previous day's close of 45.0625/07.
"The rupee was firm in early deals due to the dollar's fall abroad. But the market turned dollar biddish in the second half of the session for month-end and oil-related purchases," said a dealer at a foreign bank. "The slide in stocks also put downward pressure on the rupee."
Indian firms normally increase dollar purchases at the end of the month to meet routine import and overseas debt payments.
Foreign funds have pulled out more than $600 million from stocks in October, dragging the rupee down 2.4 percent. Their net investment of about $8.5 billion in the first nine months of 2005 had been a key support for the rupee earlier.
The dollar fell from a two-year high against the yen on Thursday, as investors grew wary that an investigation into accounting practices at automaker General Motors could undermine confidence in the US economy.
By 1203 GMT the dollar traded 0.55 percent down on the day against the euro at $1.2134 after hitting a two-week low at $1.2151. It was half a percent down at 115.30 yen, after briefly scoring a two-year high of 116.22 in Asian trade.