The rupee inched higher by 5 paise to 73.24 against the US dollar in early trade on Monday supported by positive domestic equities.
At the interbank foreign exchange, the domestic unit opened on a flat note at 73.24 against the dollar, registering a rise of 5 paise over its previous close.
On Friday, the rupee had closed at 73.29 against the US dollar.
The rupee started this Monday on a flat note against the dollar as the greenback has started on a slightly positive note this week after weakening last week, Reliance Securities said in a research note.
Most of the Asian currencies are trading weaker against the dollar and could cap the appreciation bias, the note added.
Markets could look for cues from WPI inflation data, traders said.
On the domestic equity market front, the 30-share BSE Sensex was trading 418.4 points or 0.86 percent higher at 49,150.95. Similarly, the broader NSE Nifty advanced 110.25 points or 0.75 percent to 14,788.05.
The dollar index, which gauges the greenback's strength against a basket of six currencies, was trading higher by 0.10 percent at 90.40.
Foreign institutional investors (FIIs) remained net sellers in the capital markets, as they pulled out Rs 2,607.85 crore on Friday, as per provisional data.
Brent crude futures, the global oil benchmark, were trading up 0.06 per cent at USD 68.75 per barrel.
Meanwhile, India's COVID-19 tally mounted to 2,49,65,463 on Monday with 2,81,386 fresh COVID-19 cases, the lowest in 27 days, while the death toll climbed to 2,74,390 with 4,106 fatalities, according to Union health ministry data.