The Indian rupee appreciated by 22 paise at 48.74 in early trade on Wednesday, extending gains on increased dollar sales by exporters amid expectations of fresh capital inflows by funds as market may open higher in tandem with firming trends on the other Asian equity markets.
Dollar's weakness against major currencies also supported the rupee to some extent.
At the Interbank Foreign Exchange (Forex) market, the domestic unit was quoted higher at 48.74 a dollar, a gain of 22 paise over the previous close of 48.96/98. Yesterday, rupee ended 12 paise stronger as BSE Sensex rebounded 3.39 per cent after four straight falls.
Forex dealers said rupee's rise against the dollar was mainly because of an impressive bounce-back in equity markets, which raised hopes of fresh capital inflows by foreign funds.