The rupee edged higher by five paise to 62.05 against the US dollar in early trade on Thursday at the Interbank Foreign Exchange on sustained selling by exporters.
The rupee had gained 12 paise to close at three-week high of 62.10 in the previous session.
Besides strengthening of other currencies against the dollar in overseas market, increased capital inflows and fall in retail inflation supported the rupee, forex dealers said.
The Consumer Price Index (CPI), which was released on Wednesday after market hours, eased to a two-year low of 8.79% in January on account of fall in food prices.
The benchmark BSE Sensex rose by 38.38 points, or 0.19%, to 20,486.87 in early trade on Thursday.