The Indian rupee ended higher on Friday to record its best week in five as the dollar weakened on the back of increased bets for a rate pause by the U.S. Federal Reserve, while persistent dollar inflows into stocks also aided the sentiment.

The rupee closed at 82.3050 against the U.S. dollar, compared to 82.4050 on Thursday. It had reached a high of 82.28, the highest since May 17.

The rupee rose 0.32% for the week, logging its best performance since the week ending April 28.

The dollar index was down 0.1%, extending its losses from Thursday and was on track to record its first weekly decline in four. Asian currencies were higher on the day.

Upbeat growth numbers coming from India and subsequent foreign inflows are supporting the rupee, said Ritika Chhabra, quant macro strategist at Prabhudas Lilladher PMS.

Easing domestic inflation, stronger-than-expected economic growth data, and fast-paced expansion of India's factory output have improved investor confidence in the country, analysts said.

Foreign investors bought over $5 billion in Indian equities in May, data showed.

The USD/INR is also seeing a support at 82.30 levels, analysts and traders said.

Softer U.S. economic data coupled with calls from Fed officials for a pause in the June 13-14 meeting, drove bets of a Fed rate hike to nearly 30% from 67% early this week.

Investors are now eyeing the U.S. jobs report due later in the day and the inflation data scheduled for June 12, which could potentially change the path of the Fed's decision and provide a direction for the dollar index.

High dollar deposit rates will stop the dollar from selling off too quickly, but unless the May non-farm payroll surprises on the upside, the bias for dollar index lies towards the 103.20 area, ING analysts said in a note. (Reporting by Nimesh Vora and sethuraman NR; Editing by Janane Venkatraman and Sonia Cheema)