In early trade on Monday, the rupee gained 24 paise to 81.78 against the US dollar, tracking a positive trend in domestic equities and foreign fund inflows. The domestic unit opened at 81.90 against the dollar on the interbank foreign exchange, then rose to 81.78, a 24 paise increase from its previous close.
The rupee closed at 82.02 against the US dollar on Thursday.
Due to Good Friday, the equity and forex markets were closed on April 7.
Meanwhile, the dollar index, which measures the strength of the US currency against a basket of six currencies, increased 0.11 percent to 102.20.
Brent crude futures fell 0.22 percent to USD 84.93 per barrel, the global oil benchmark.
Domestically, the rupee was largely unaffected by the Reserve Bank of India's Monetary Policy Committee meeting.
"A pause in rate hikes could further narrow the interest rate differential between the US and India, putting pressure on the rupee." Furthermore, the market will continue to monitor the development of rising COVID cases in India," CR Forex Advisors MD-Amit Pabari said, adding that on April 9, India reported 5,357 new COVID cases, with a caseload of 32,000 active cases.
Additionally, it has been observed that RBI hardly keeps Dollar-Rupee below 81.80-81.50 levels, so this zone should act as a strong support for the pair, Pabari added.
In the domestic equity market, the 30-share BSE Sensex advanced 55.91 points or 0.09 per cent to 59,888.88. The broader NSE Nifty gained 22.25 points or 0.13 per cent to 17,621.40.
Foreign Institutional Investors (FIIs) were net buyers in the capital market on Thursday as they purchased shares worth Rs 475.81 crore, according to exchange data.