The Indian rupee started the day on a positive note, gaining 13 paise to 81.82 against the US dollar in early trade on Thursday. This boost was attributed to foreign fund inflows into the country. The domestic unit opened at 81.93 against the dollar and then climbed to 81.82, a rise of 13 paise over the previous day’s close of 81.95.

Amit Pabari, MD of CR Forex Advisors, said that FDI and FPIs have been acting as life support for the rupee, especially in the face of higher US bond yields and a risk-off-tilted equity sentiment, which make a base case for a stronger USD. He added that in March, FPIs are net investors with more than Rs 10,000 crore in equities, and predicted that the rupee could trade in the range of 81.50 to 82.50 in the short term.

The dollar index, which measures the strength of the greenback against a basket of six currencies, fell 0.02 per cent to 105.63. This slight dip in the index also contributed to the rupee’s gains.

Foreign Institutional Investors (FIIs) were net buyers in the Indian capital market on Wednesday, as they purchased shares worth Rs 3,671.56 crore, according to exchange data. This influx of foreign funds has been beneficial to the rupee’s performance against the US dollar.

In the domestic equity market, however, there was a decline on Thursday. The 30-share BSE Sensex fell 131.61 points, or 0.22 per cent, to 60,216.48 points, while the broader NSE Nifty declined 33.30 points, or 0.19 per cent, to 17,721.10 points.

Brent crude futures, the global oil benchmark, rose 0.02 per cent to USD 82.66 per barrel on Thursday, which could have an impact on India’s oil imports and foreign exchange reserves in the future.

Overall, the rupee’s gains in early trade on Thursday were a result of foreign fund inflows and a dip in the dollar index. However, the domestic equity market’s decline and the global oil benchmark’s rise could potentially impact the rupee’s performance in the near future.