Mumbai: The rupee strengthened by 3 paise to 64.94 against the US dollar in early trade at the Interbank Foreign Exchange market on increased selling of the American currency by banks and exporters.

Forex dealers said, besides selling of the greenback by banks and exporters, dollar's weakness against some other currencies overseas backed the rupee but a lower opening of domestic equity markets, capped the gains.

Yesterday, the rupee had ended higher by 18 paise at 64.97 against the US dollar after the Reserve Bank lowered its inflation forecast and revised up its growth outlook.

Meanwhile, the benchmark BSE Sensex slipped 93 points to 33,503.25 in early trade today.  PTI