Indian rupee, the local currency appreciated by 16 paise to 74.78 per US dollar on Thursday's opening trade amid weak US dollar, ahead of the Reserve Bank of India's monetary policy decision.

The domestic unit opened strong at 74.82 per dollar at the interbank forex market and gained further ground to touch 74.78 per dollar, registering a gain of 16 paise over its previous close of 74.94 against the US dollar on Wednesday.

Forex traders said investor focus will be on the RBI monetary policy, scheduled for later in the day. Positive trend in the equity markets and weak American currency also supported the rupee, traders said.

The dollar index, which gauges the greenback's strength against a basket of six currencies, fell 0.12 per cent to 92.75.

"A 25 bps cut is widely anticipated. More than the cut, the tone of the policy statement and regulatory measures to facilitate transmission would be in focus," said Abhishek Goenka, Founder and CEO, IFA Global.

On the domestic equity market front, the 30-share BSE benchmark Sensex was trading 213.30 points higher at 37,876.63 and broader NSE Nifty advanced 63 points to 11,164.65.

Foreign institutional investors were net sellers in the capital market as they offloaded shares worth Rs 60.18 crore on Wednesday, according to provisional exchange data.

Oil price jumped to five month high after witnessing a sharp fall in US crude inventories but saw higher level selling as coronavirus cases casted shadow on demand recovery. Brent crude futures, the global oil benchmark, rose 0.22 per cent to USD 45.27 per barrel.

Meanwhile, coronavirus cases in India neared 19.64 lakh with total deaths standing at 40,739. Worldwide, there are 189 lakh confirmed cases and 7.1 lakh deaths from the coronavirus COVID-19 outbreak.

(Edited with PTI inputs)

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