At 10:35 a.m., the partially convertible rupee was at 51.30/32 per dollar after touching 51.26, its strongest since Feb. 27, and firmer than its previous close of 51.385/395.

Naveen Raghuvanshi, an associate vice president with Development Credit Bank, said he expected the rupee to trade in a 51.25 to 51.45 range.

Indian shares seesawed in early trade as investors turned cautious after the market had risen for three sessions in a row.

Exchange data showed foreign funds bought nearly $50 million of stocks on Friday, but they have been net sellers of $2.2 billion so far in 2009, while the rupee is down about 5 per cent.

Foreign portfolio flows are a key driver for the rupee, which fell more than 19 per cent in 2008 when the funds withdrew more than $13 billion from Indian equities.

The dollar index, a gauge of the US unit's performance against six major currencies, was down 0.2 per cent. Most Asian units were also stronger.

Dealers said there could be some dollar demand from importers and refiners.