Indian rupee, the domestic currency appreciated by 16 paise to 73.77 per US dollar on Friday's opening session as the Reserve Bank of India maintained status quo on benchmark interest rate for the third time in a row.
Sustained foreign fund inflows, positive domestic equities and weakness of the American currency in the overseas market also supported the local unit.
The domestic unit opened at 73.81 per US dollar at the interbank forex market and gained 16 paise to 73.77 against the greenback over its previous close.
On Thursday, the Indian rupee closed 12 paise lower at 73.93 per US currency after a range-bound trade as investors remained cautious ahead of the RBI policy meet outcome.
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 was down 0.02 per cent to 90.69 against a basket of six currencies.
Foreign portfolio investors (FPIs) bought shares worth Rs 357.35 crore, while domestic institutional investors (DIIs) were net sellers to the tune of Rs 1,635.97 crore in the Indian equity market on 2 December 2020, provisional data showed.
On the domestic equity market front, market indices hit new record highs on Friday, in line with global peers, after apex lender RBI in its Monetary Policy Committee meet kept the policy stance 'accommodative' and kept the key lending repo rate unchanged. Sensex was rising 300 points higher at 44,955and Nifty gained 83 points higher at 13,217. During the session, Sensex touched a lifetime high of 45,033 and Nifty hit an all-time high of 13,250.
Oil prices lost ground as producers including Russia and Saudi disagreed over production cuts. OPEC+ meeting continues. Brent crude futures, the global oil benchmark, was trading 1.93 per cent higher at USD 49.65 per barrel.