Rupee rises 1 paisa to ₹86.67 against US dollar in early trade

The rupee rose 1 paisa to ₹86.67 against the US dollar in early trade on Monday amid a weakening greenback against international currencies.

However, a sharp fall in the domestic equity markets in morning trade, a decline in the country's forex reserves and sustained FII outflows prevented further gains, forex traders said.

At the interbank foreign exchange, the domestic unit opened at ₹86.58, up 10 paise against the US dollar, but gave up initial gains to reach ₹86.67, just 1 paisa higher than Friday's close. On Friday, the rupee pared initial gains and settled 4 paise lower at ₹86.68 against the US dollar.

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was trading 0.39% lower at 106.19.

Brent crude, the global oil benchmark, traded flat at USD 74.43 per barrel in futures trade.

In the domestic equity market, the 30-share BSE Sensex Sensex fell sharply by 567.62 points to 74,743.44 in early trade, while Nifty dropped 188.4 points to 22,607.50.

Foreign institutional investors (FIIs) offloaded equities worth ₹3,449.15 crore on a net basis on Friday, according to exchange data.

The latest RBI data released on Friday showed India's forex reserves dropped by USD 2.54 billion to USD 635.721 billion in the week ended February 14, snapping the three-week streak of increase.

In the previous reporting week, the reserves had increased by USD 7.654 billion to USD 638.261 billion.