The rupee inched up by 2 paise to 61.89 against the American currency in the late morning trade on selling of dollars by banks and exporters due to weakness of the greenback overseas.
The rupee resumed higher at 61.88 per dollar as against the last closing level of 61.91 at the Interbank Foreign Exchange market and hovered in a range of 61.83-61.92 before quoting at 61.89 at 10:45am.
In the overseas market, the dollar dropped against the euro and other major currencies yesterday as Treasury yields edged lower.
Crude oil prices were flat in holiday-reduced Asian trade on Monday, as investors booked profits before the end of the year.
New York's main contract, West Texas Intermediate (WTI) for February delivery, added two cents to $99.31 in mid-morning trade while Brent North Sea crude for February rose five cents to $111.26.
Meanwhile, the benchmark Sensex firmed up by 39.60 points or 0.19% to 21,182.61 at 10:55am.