The Indian rupee strengthened by 11 paise against the US greenback on Friday in early trade on dollar selling by banks amid hopes of fresh capital inflows by funds and firm opening on the domestic stock markets in line with higher Asian shares.
At the Interbank Foreign Exchange (Forex) market, the domestic currency traded higher at 48.73 against the US currency, a gain of 11 paise over the Thursday's close of 48.84/85 a dollar.
The rupee closed 16 paise lower at 48.84/85 a dollar on Thursday.
Forex dealers said dollar selling by banks, on expectations of fresh capital inflows by funds after Asian stock markets firmed up, raised hopes that the domestic bourses may open stronger.
Dollar's weakness against some other regional currencies such as Japanese yen also supported the Indian rupee, they said.
Among Asian markets, Hong Kong's Hang Seng was up 2.01 per cent, while Japan's Nikkei was up 1.87 per cent in early trade on Friday.