Mumbai: On Thursday, The rupee depreciated 20 paise to 71.76 in early trade at the forex market ahead of the Reserve Bank of India's interest rate decision. The domestic currency has been trading in a narrow range in the last two trading sessions as investors were cautious ahead RBI's Monetary Policy Committee outcome scheduled to be announced later in the day.

While Forex traders said positive opening in domestic equities, fresh foreign fund inflows and easing crude prices, however, capped the losses for the domestic unit. At the Interbank Foreign Exchange, the rupee opened on a weak note at 71.73 then fell further to 71.76 against the US dollar, showing a decline of 20 paise over its previous closing.

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The rupee had settled 1 paise higher at 71.56 against the US dollar on Wednesday. Foreign funds purchased shares worth Rs 694.97 crore on a net basis, and domestic institutional investors bought shares worth Rs 525.26 crore Wednesday, provisional data showed.

The Brent crude oil in global benchmark, was trading at USD 62.46 per barrel, lower by 0.32 per cent. Meanwhile, domestic equity market opened on a higher note. The 30-share BSE benchmark Sensex, was trading at 37,081.76, up 106.55 points in early trade; and the wide-based Nifty was also trading up by 30.30 points at 11,092.75.