The rupee recovered most of its overnight losses and closed 31 paise higher at 61.85 against the dollar today after a rally in local equities and fresh sales of the US currency by exporters.A sharp fall in the dollar overseas and continued capital inflows also boosted the rupee. The dollar index, which tracks the performance of the US currency against six major global rivals, was down 0.62 per cent. The rupee's rise was the most since December 16 and helped the local currency complete its second weekly gain in a row.