In the last four trading sessions, the Indian rupee has gained 146 paise.
Forex dealers said sustained foreign capital inflows after a clear mandate for the BJP to form a stable government at the Centre boosted the sentiment.
They added that a higher opening in the domestic equity market also supported the rupee but dollar's gain against some of its rivals overseas limited the domestic currency's gains.
The Indian rupee rose 20 paise to close at a fresh 11-month high of 58.59 against the dollar yesterday.
Meanwhile, the benchmark BSE Sensex gained 224.11 points, or 0.91 per cent, to 24,587.16 in early trade today.