The rupee on Thursday rebounded by 23 paise to close at 73.64 (provisional) against the US dollar following a firm trend in domestic equities and losses in the American currency in the overseas market. At the interbank forex market, the local unit opened flat at 73.85 against the greenback. During the session, the domestic unit witnessed an intra-day high of 73.61 and finally settled at 73.64.

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On Wednesday, the rupee had declined by 26 paise to close at a nearly four-week low of 73.87 against the US currency. Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, fell 0.29 percent to 93.19.

"The Indian rupee erased Wednesday's loss tracking cues from regional currencies and a surge in global equities after the US Federal Reserve's meeting. Globally risk is looking fairly balanced with two large events of the week FOMC and Evergrande chaos seem to be behind," said Dilip Parmar, Research Analyst, HDFC Securities. The rupee expected to stay right following huge foreign fund inflows from recent IPOs and in the bond market.

"Markets have now started positioning for India rating upgrade from global rating agencies," Parmar said.

Brent crude futures, the global oil benchmark, fell 0.10 percent to USD 76.11 per barrel.

On the domestic equity market front, the BSE Sensex ended 958.03 points or 1.63 percent higher at 59,885.36, while the broader NSE Nifty advanced 276.30 points or 1.57 percent to 17,822.95. Meanwhile, foreign institutional investors were net sellers in the capital market on Wednesday as they offloaded shares worth Rs 1,943.26 crore, as per exchange data.