The rupee closed lower at 54.48 against the dollar on the back of heavy buying of dollars by some banks and oil importers.
The rupee, which opened lower at 54.52, had closed at 54.46 on Thursday due to heavy dollar buying by large corporates and some defence units.
After the inflation figures were announced, the rupee wiped off its initial losses and gained to 54.26 in intra-day trade.
The Wholesale Price Index-based Inflation declined to 7.24 per cent in November from 7.45 per cent in the previous month and 9.46 per cent in November 2011.
The decline in inflation may lead to a rate cut by the Reserve Bank in its mid-quarter monetary policy review on Tuesday.
