The rupee increased by 9 Paise to 70.78 against the USD in early trading before the RBI's decision.

India's rupee strengthened 9 paise to 70.78 against the US dollar in early Friday trading before the decision by the Reserve Bank of India's monetary policy.

Forex traders say domestic units are trading higher as investors believe the RBI will cut interest rates again to stimulate slowing economic growth.

The Monetary Policy Committee (RBC) of the Monetary Policy Committee (MPC) is scheduled to announce the fourth bi-later policy decision for this fiscal year.

At the rupee exchange opening at 70.82, then rising again and reaching a high of 70.78, up 9 points in the previous period.

However, local units were not able to make a profit and traded at 70.83 against the dollar at 0953 hrs.

On Thursday the rupee settled at 70.87 per US dollar.

Traders said the positive launch in the domestic stock market and the weakening dollar boosted the domestic unit.

Meanwhile, the domestic stock market launched positive on Friday, with the Sensex Index trading at 202.19, rising at 38,309.06 and improving at 41.75 points at 11,355.75.

The dollar index, which measures the strength of the dollar per six-currency basket, decreased slightly by 0.01 percent to 98.85.

However, the increase in crude oil prices and the outflow of foreign funds has not affected local authorities.

Brent crude oil futures, the world's benchmark oil index, rose 0.36 percent to 57.92 US dollars per barrel.

Foreign institutional investors (FII) continued to net sellers in the capital market, pulling Rs. 810.72 crore on Thursday, according to temporary exchange data.