Extending its gains for the fourth straight day, the rupee strengthened by 20 paise in early trade today at 46.60 against the US dollar on expectations of more capital inflows into domestic equities that may open higher in tandem with other Asian markets.
Dollar's weakness against other currencies also supported the rupee.
At the Interbank Foreign Exchange (Forex) market, the local unit strengthened by 20 paise to 46.60. The Indian rupee ended 22 paise higher at 46.80/81 in the previous session on Friday.
Forex dealers said expectations of continued inflow of foreign funds into local bourses that may open in the positive zone tracking other Asian markets pushed up rupee's demand.
Hong Kong's stock exchange Hang Seng opened firm by 1.10 per cent.