Mumbai, Sep 30 (PTI) The rupee rose 3 paise to 88.72 against the US dollar in early trade on Tuesday on the back of a fall in crude oil prices and positive sentiments in the domestic equity markets.

However, a marginally stronger greenback, coupled with FII outflows, prevented sharper gains in the local unit, according to forex traders. They added that the markets are awaiting the Reserve Bank of India's (RBI's) Monetary Policy Committee decision, which will be announced on Wednesday.

At the interbank foreign exchange, the rupee opened at 88.73 against the US dollar before inching up to 88.72, higher by 3 paise from its previous close.

Rupee consolidated in a narrow range and settled lower by 3 paise at 88.75 against the greenback on Monday.

"FPIs continue to be sellers in equity markets taking rupee down whenever it rises and with no further news on the India-US trade treaty, markets are awaiting the RBI's policy decision on Wednesday," Anil Kumar Bhansali, Head of Treasury and Executive Director, Finrex Treasury Advisors LLP, said.

The RBI meeting is taking place against the backdrop of ongoing geopolitical tensions and the US imposing 50 per cent tariffs on Indian shipments.

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was trading at 97.94, higher by 0.04 per cent.

Brent crude, the global oil benchmark, was trading 0.79 per cent lower at USD 67.43 per barrel in futures trade.

"Brent fell on increased supply from Kurdistan exports to Turkey, with OPEC+ preparing for another rise in production in November and the possible US shutdown also reducing the consumption," Bhansali said.

On the domestic equity market front, markets bounced back in early trade with the Sensex climbing 312.88 points to 80,677.82 and the Nifty rising 96.9 points to 24,731.80.

Foreign Institutional Investors offloaded equities worth Rs 2,831.59 crore on Monday, according to exchange data.

Meanwhile, the US has announced the imposition of a 100 per cent tariff on branded or patented drugs entering the US from October 1, except for pharmaceutical companies building manufacturing plants in the US.

The exemption covers projects where construction has started, including sites that have broken ground or are under construction. PTI TRB DR DR

US tariff on pharmaceutical imports tightens trade restrictions while exempting companies building manufacturing facilities domestically. The rupee's marginal early appreciation was supported by lower crude prices and equity gains but limited by FII selling and a firmer dollar, with markets awaiting the central bank's Monetary Policy Committee decision. Separately, the US announced heightened tariffs on branded or patented pharmaceutical imports while exempting projects that build manufacturing capacity on US soil, including sites already under construction.