The rupee gained 36 paise to 82.24 against the US dollar in early trade on Friday as fresh foreign fund inflows and a positive trend in domestic equities strengthened investor sentiments.

At the interbank foreign exchange, the domestic unit opened at 82.28 against the dollar, then gained ground and rose to 82.24, registering a rise of 36 paise over its previous close.

On Thursday, the rupee closed at 82.60 against the US currency.

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, fell 0.13 per cent to 104.88.

Brent crude futures, the global oil benchmark, declined 0.39 per cent to USD 84.42 per barrel.

More read: Stock markets climb nearly 1% on firm global trends

"The Indian rupee had the best week after more than one month, helped by the renewed risk-on sentiment in global markets. The rupee seems to be gaining in the NDF market suggesting offshore players did a long unwinding of the USD position," CR Forex Advisors MD Amit Pabari said.

Also, inflows of over ₹12,000 crore on the back of Adani's block deal made the job for rupee bulls easier.

"The local currency is expected to gain against the USD this month as dollar inflows from corporates are on the higher side at the end of the financial year in March. However, moving on, we expect a theme of aggressive Fed policy in the near term to limit the gains in the local unit," Pabari added.

Foreign Institutional Investors (FIIs) were net buyers in the capital market on Thursday as they purchased shares worth ₹12,770.81 crore, according to exchange data.

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