The Indian rupee appreciated by 7 paise to 84.22 against the US dollar in early trade on Tuesday, buoyed by a sharp rebound in domestic equities and improved investor risk appetite.

Forex traders attributed the rupee’s strengthening to positive market sentiment, bolstered by the MSCI equity index rebalancing. This process prompted a significant inflow of foreign funds, as Foreign Institutional Investors (FIIs) turned net buyers, breaking a 40-session streak of selling. FIIs purchased equities worth ₹9,947 crore on Monday, lending robust support to the Indian currency.