Forex traders said the rupee's rise was supported by dollar-selling by exporters and banks.
At the Interbank Foreign Exchange (forex) market, the rupee opened lower at 70.70 and lost further ground to hit a low of 70.75.
The local unit, however, pared the initial losses and finally ended the session at 70.46 to the US dollar, up 3 paise.
Brent crude, the international benchmark, was trading 0.32 per cent lower at USD 61.88 per barrel Wednesday.
"RBI has maintained status quo on policy rates in line with consensus expectations. To address liquidity issues, the SLR requirement would be gradually brought down to 18 per cent from 19.5 per cent currently.
"Bonds added to the rally and we expect the positive impact of the same to rub off on equities as the global cues turn benign," said Gaurav Dua, Head of Research, Sharekhan by BNP Paribas.
Benchmark equity indices fell for the second straight day Wednesday. The BSE Sensex tumbled 249.90 points, or 0.69 per cent, to close at 35,884.41. Similarly, the broader NSE Nifty fell 84.55 points, or 0.74 per cent, to end at 10,784.95.
The Financial Benchmark India Private Ltd (FBIL) set the reference rate for the rupee/dollar at 70.5171 and for rupee/euro at 79.8366. The reference rate for rupee/British pound was fixed at 89.4458 and for rupee/100 Japanese yen at 62.37.
(With inputs from agencies.)