The battered rupee rose 23 paise to 74.16 against the US dollar on Wednesday after the American currency weakened overseas amid increased selling by exporters.

Besides, RBI's decision to inject Rs 12,000 crore liquidity into the system through the purchase of government bonds on October 11 to meet the festival season demand for funds also supported the recovery in rupee, dealers said.

A higher opening of domestic equity markets too aided the recovery in the domestic unit.

The benchmark BSE Sensex rose 110.20 points or 0.31 per cent, to 34,409.67 in opening trade.

At the forex market, the rupee strengthened by 23 paise to quote at 74.16 against the US dollar in early trade on fresh selling of the American currency by banks and exporters.

The rupee slumped by 33 paise to finish at a fresh lifetime low of 74.39 against the US dollar Tuesday on high crude oil prices, strengthening of the greenback and unabated foreign fund outflows.

Meanwhile, DIIs bought shares worth Rs 1,526 crore, while FIIs pulled out a net Rs 1,242 crore Tuesday, as per provisional stock exchange data.