The rupee strengthened by 11 paise to 61.08 against the US dollar at the Interbank Foreign Exchange in early trade on Wednesday.
Fresh selling of the dollar by exporters amid sustained foreign capital inflows supported the rupee, dealers said.
Early gains in domestic equity markets and dollar's weakness against major currencies overseas also helped rupee post gains, they added.
The rupee had closed flat at 61.19 against the dollar yesterday on alternate bouts of buying and selling.
Meanwhile, the BSE benchmark index Sensex rose by 60.81 points, or 0.27 per cent, to 21,893.42 in early trade.