The dollar's weakness against some currencies overseas backed up the rupee at the Inter-bank Foreign Exchange.

Mumbai: The rupee continued to tread the recovery path for the second day today, climbing 12 paise to 67.78 against the dollar on increased selling of the American currency by exporters and banks ahead of RBI policy meet scheduled later in the day.

Forex dealers said that besides sustained selling of the greenback by banks and exporters, the dollar's weakness against some currencies overseas backed up the rupee at the Inter-bank Foreign Exchange.

Yesterday, the local currency had staged a strong recovery by gaining 31 paise to close at 67.90 -- its highest level in three weeks -- on heavy dollar selling and rising expectations of a rate cut by RBI.

Meanwhile, the benchmark BSE Sensex was up 77.17 points, or 0.29 per cent, at 26,469.93 in early trade.