The rupee appreciated 3 paise to 83.37 against the US dollar in early trade on Monday, amid sustained inflow of foreign funds and bullish sentiment in the domestic equity market.

An upward movement in crude oil prices, however, weighed on the Indian currency, according to forex traders.

At the interbank foreign exchange market, the rupee opened at 83.39 against the dollar and rose to 83.37, up 3 paise from its previous close.

On Friday, the rupee depreciated 4 paise to close at 83.40 against the US dollar.

Gaurang Somaiya, forex and bullion analyst at Motilal Oswal Financial Services, said that investors will keep a close eye on monetary policy decisions from US Federal Reserve and other central banks to be announced this week.

"... the commentary from the (US Fed) Governor will be important to watch and gauge a view for the major crosses. Today, volatility could remain low as no major economic data is expected to be released from the US. We expect the USD-INR (spot) to trade sideways and quote in range of 83.20 and 83.50," Somaiya added.

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was trading 0.03 per cent higher at 103.66.

Brent crude futures, the global oil benchmark, advanced 0.59 per cent to USD 76.29 per barrel.

In the domestic equity market, the 30-share BSE Sensex breached the 70,000-level for the first time on Monday and was trading 198.72 points or 0.28 per cent higher at 70,024.32 points. The broader NSE Nifty also jumped 39.70 points or 0.19 per cent at 21,009.10 points.

Foreign Institutional Investors (FIIs) were net buyers in the capital markets on Friday as they bought shares worth ₹3,632.30 crore, according to exchange data.

On Friday, the Reserve Bank of India (RBI) kept the benchmark repurchase rate unchanged at 6.5 per cent and retained the retail inflation projection for the current fiscal at 5.4 per cent.

As per the latest RBI data, India's foreign exchange reserves increased to $604 billion as on December 1, surpassing the $600 billion-mark after a gap of about four months.