Rupee gains 6 paise to reach 83.94 against US Dollar in early trade

However, sharp gains in the rupee were limited due to fluctuations in the domestic equity markets and outflows from Foreign Institutional Investors (FIIs), according to forex traders.

At the interbank foreign exchange market, the rupee opened at 83.97 against the US dollar, briefly rising to 83.92 before settling at 83.94—6 paise higher than its previous close of 84.00 on Monday.

The Reserve Bank of India’s (RBI) newly reconstituted rate-setting panel began its deliberations on the upcoming bi-monthly monetary policy on Monday.

The outcome of these discussions, set to be announced on Wednesday, could influence the rupee's trajectory in the coming days.

Analysts expect the RBI to diverge from the US Federal Reserve, which recently cut its benchmark rate by 50 basis points, as well as other central banks in developed nations that have reduced interest rates.

On the domestic equity front, both the Sensex and Nifty remained stable, with the Sensex trading at 81,044 points and Nifty at 24,787.40.

Both indices had faced losses over the previous six trading sessions.

Meanwhile, the dollar index, which measures the greenback's strength against a basket of six major currencies, dipped 0.13 percent to 102.39.

Brent crude, the global oil benchmark, also fell by 1.62 percent to USD 79.62 in futures trading.

FIIs continued to be net sellers in the Indian capital markets on Monday, selling shares worth Rs 8,293.41 crore in the cash segment, according to stock exchange data.