The Indian rupee has strengthened by 9 paise to the level of 48.60 against the US dollar in the early morning trade this morning in the on the Interbank Foreign Exchange market.

The increase was mainly due to increased inflows of foreign funds as well as the strengthening of the Euro against the US dollar in international markets, according to the foreign exchange dealers.

The rupee had closed at 48.69/70 against the US dollar on Friday, which is its highest in three months. The new momentum is due to continued dollar selling by exporters in the country.

However, the gains were not withheld following a report that said that the Reserve Bank of India had allowed relaxed norms on speculative overnight open forex positions of some banks in the country. The restrictions on speculative overnight open forex positions were imposed to stem the fall of the rupee against the foreign currency.

Internal investors have invested close to $ 6 billion in Indian debt and equity this year. According to latest data released by the Securities Exchange board of India (SEBI), FIIs put close to $ 1 billion in Indian equities on the first three days of February alone.

The national currency was trading at Rs 48.74 to US dollar.