The rupee on Thursday strengthened further by 43 paise to trade at fresh three-week high of 62.95 against the dollar in early trade boosted by consistent capital inflows and dollar sales by exporters.
The domestic currency has spurted by 425 paise or 6.28% in last five straight sessions.
The rupee had gained 46 paise to close at 63.38 on Wednesday against the dollar on the back of fresh RBI steps to boost foreign fund inflows and hopes of a diplomatic solution in Syria.
Dealers said besides increased capital inflows driven by recent measures announced by the RBI, a higher opening in domestic equity market and dollar's weakening against major currencies overseas helped the rupee rise.
Meanwhile, the BSE benchmark index Sensex rose by 54.60 points, or 0.27%, to 20,052.05 in early trade.