The rupee became stronger by 45 paise to 59.60 against the US dollar in early trade on Tuesday at the Interbank Foreign Exchange market amidst exit polls forecasting the BJP-led NDA forming the government at the Centre.
Increased selling of the dollar by banks and exporters amid sustained foreign capital inflows also supported the rupee, dealers said.
Besides, strong rally in domestic equity market in opening trade also helped the rupee post gains but dollar's strength against other currencies overseas limited the gains, they added.
In a volatile session, the rupee ended one paise down at 60.05 in Monday's trade on late demand of the American currency after rising to nearly ten-month high of 59.51.
Meanwhile, the benchmark BSE Sensex rose by 370.91 points, or 1.57%, to hit a new record high of 23,921.91 in opening trade.