Domestic currency surged 16 paise to 74.87 against the US dollar in opening trade on Thursday amid easing crude oil prices.
At the interbank foreign exchange, the rupee opened strong at 74.92 against the dollar and gained further to touch 74.87 in early deals, a rise of 16 paise over its previous close.
On Wednesday, the rupee had settled at 75.03 against the US dollar.
Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, rose 0.04 per cent to 93.84.
Global oil benchmark Brent crude futures fell 2.03 per cent to $82.86 per barrel.
On the domestic equity market front, BSE Sensex was trading 363.32 points or 0.59 per cent lower at 60,780.01, while the broader NSE Nifty declined 119.75 points or 0.66 per cent to 18,091.20.
Foreign institutional investors were net sellers in the capital market Wednesday as they offloaded shares worth Rs 1,913.36 crore, as per exchange data.
According to Anil Kumar Bhansali, Head of Treasury, Finrex Treasury Advisors, the range for USD/INR for the day is between 74.80 to 75.20.
"Markets await for the US Fed meeting but equities are down while currencies are in a range. On Wednesday buying was from ONGC and BPCL which may continue on Thursday," Bhansali said.
Bhansali further added that "so, exporters may sell above 75 at around 75.10 and importers may buy near to 74.80."