The Indian rupee strengthened by 20 paise against the US currency in opening trade on Friday in anticipation of increased capital inflows as the stock markets may continue to rise on firmness in other Asian markets and a weak dollar overseas.
Dollar selling by exporters also supported the Indian rupee.
At the Interbank Foreign Exchange (Forex) market, the domestic unit appreciated by 20 paise to quote at 48.43 a dollar over previous close. The Rupee had ended 12 paise lower at 48.63/64 in volatile trade yesterday.
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Forex dealers said hopes of increased capital inflows as markets may open in positive territory in tandem with other firming Asian markets, up almost 0.75 per cent in morning trade, and dollar selling by exporters were boosting the rupee sentiment.
Meanwhile, the BSE Sensex had rallied over 818 points in the past five sessions.