The rupee strengthened by 9 paise to trade at 65.37 against the dollar in opening trade today on fresh selling of the United States currency by exporters and banks.
The rupee had surged to a 16-month high of 65.41 per dollar yesterday after a four-day rally in the currency stoked by the BJP's win in the key state of Uttar Pradesh.
According to forex dealers, dollar's weakness against other currencies overseas and selling of the United States currency by exporters and banks supported the rupee.
The domestic unit opened strong by 8 paise at 65.38 at the Interbank Foreign Exchange market. Local currency rose 12 paise or 0.18 percent against dollar to settle at 65.36.
The RBI fixed the reference rate for the dollar at 65.5411 and for the euro at 70.607.
The Dollar index, a measure of the value of the U.S. dollar relative to a basket of foreign currencies, to settle at 13.00.
In cross-currency trade, the rupee continued its downtrend against the British pound to end at 80.88 from 80.21 and dropped against the Japanese yen to finish at 57.85 per 100 yens compared to 57.65 earlier.