Mumbai: The rupee appreciated by 16 paise to 73.77 against the US dollar in the opening session on Friday as the Reserve Bank of India maintained status quo on benchmark interest rate for the third time in a row.
Traders said sustained foreign fund inflows, positive opening in domestic equities and weakness of the American currency in the overseas market also supported the local unit.
At the interbank forex market, the domestic unit opened at 73.81 against the US dollar and gained ground to touch a high of 73.77 against the greenback, registering a rise of 16 paise over its previous close.
On Thursday, the rupee had settled at 73.93 against the American currency.
The Reserve Bank of India on Friday maintained status quo for the third time in a row and kept benchmark lending rate unchanged at 4 per cent.
RBI Governor Shaktikanta Das said the central bank will maintain accommodative monetary policy stance to support growth and keep inflation at the targeted level.
Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was down 0.02 per cent to 90.69.
Foreign institutional investors were net buyers in the capital market as they purchased shares worth Rs 3,637.42 crore on a net basis on Thursday, according to exchange data.
On the domestic equity market front, the 30-share BSE benchmark Sensex was trading 343.73 points higher at 44,976.38, and the broader NSE Nifty rose 97.90 points to 13,231.60.
Brent crude futures, the global oil benchmark, was trading 1.93 per cent higher at USD 49.65 per barrel.
(PTI)