Elevated crude oil prices have emerged as major fears for India in form of fiscal slippage and inflationary pressure.
Easing crude oil prices and fresh foreign capital inflows provided further support, forex traders said.
Forex traders said the uptick in domestic stocks enthused investors, following which the domestic unit gained strength.
Forex traders said investors were optimistic about the US-China trade talks in October.
Rupee came under pressure after official data released on Friday showed that GDP growth fell to an over six-year low of 5 pc.
Rupee stabilised following an announcement that Finance Minister Nirmala Sitharaman will address a press conference in the evening.
Tumbling equities and incessant foreign fund outflows weighed on sentiment.
Starting off on a bullish note, the rupee settled at 71.55, clocking a gain of 16 paise.
This is the lowest level for the rupee since February 4, when it closed at 71.80 a dollar.
Rupee tumbled amid growing worries over economic slump and sustained foreign fund outflows.