The rupee strengthened by 25 paise to 61.19 against the dollar in early trade at the Interbank Foreign Exchange on Monday on increased selling of the US currency by exporters and banks amidst oil and gas reforms announced by the government.
Forex dealers said besides increased selling of the American currency by exporters and banks, a higher opening of the domestic equity market also supported the rupee but the dollar's strength against other currencies overseas on upbeat data and earnings, limited the rise.
In a major reform push, the government had on Saturday deregulated diesel prices.
The domestic currency had bounced back by 39 paise to close at 61.44 against the dollar on Friday.
Meanwhile, the benchmark BSE Sensex soared by 392.51 points, or 1.50%, to 26,501.04 in opening trade on Monday.