The rupee appreciated by 13 paise to 71.67 against the US dollar in opening trade on Tuesday, driven by positive opening in domestic equities and weakening of the greenback in overseas markets.
Forex dealers said investors were cautious ahead RBI's Monetary Policy Committee outcome scheduled for February 7.
However, selling of the American currency by exporters supported the rupee.
The rupee opened strong at 71.72 at the interbank forex market then gained further ground to touch 71.67 per dollar amid positive opening in domestic equities, displaying gains of the 13 paise against the greenback.
On Monday, the rupee had plunged by 55 paise to close at 71.80 against the US dollar.