The rupee on Tuesday rose by 23 paise to close the day at 60.42 against the dollar on fresh selling of the American currency by banks and exporters.
Dealers in foreign exchange said dollar's fall overseas triggered selling of the US unit in the domestic market.
The rupee opened higher at 60.57 per dollar as against Monday's close of 60.65 at the interbank foreign exchange (forex) market. It firmed up to 60.37 before ending at 60.42, a gain of 23 paise or 0.38 per cent from its previous close.