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Rupee appreciated 12 paise to 86.25 against the US dollar in early trade on Thursday, supported by positive domestic equities and a softer dollar in global markets.

At the interbank forex market, the Rupee opened at 86.39 per dollar before strengthening to 86.25, marking a 12 paise gain from its previous close. On Wednesday, the domestic currency had advanced 19 paise to settle at 86.37 against the greenback.

Forex analysts attributed the Rupee’s gains to strong foreign inflows into India's debt markets. However, continued foreign investor sell-offs and uncertainty over US President Donald Trump's tariff policies could limit its upward momentum.

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"The USD-INR pair is expected to trade between 86 and 86.80 in the near term. With FII outflows and liquidity deficit conditions persisting, a slight rebound towards the 86.50-86.60 range is likely," CR Forex Advisors Managing Director Amit Pabari said.

Meanwhile, the US dollar index, which measures the greenback against six major currencies, declined 0.04 per cent to 103.38. Brent crude, the global oil benchmark, rose 0.58 per cent to 71.19 dollars per barrel.

Also Read: Rupee gains 12 paise to close at 86.44 against US dollar

In a separate development, the Reserve Bank of India's (RBI) March Bulletin, released on Wednesday, highlighted that sound fiscal policies, a calibrated monetary framework, and digital transformation initiatives will provide a solid foundation for sustained economic growth.

The central bank also noted that India's macroeconomic fundamentals remain resilient, supported by strong domestic demand, steady investment flows, infrastructure expansion, and increased government spending.