In early trading, the Indian rupee decreases 12 paise to 79.25 against the US dollar

In early trade on Friday, the rupee lost 12 paise to 79.25 against the US dollar, following the strength of the American currency and ongoing outflows of foreign capital.

At the interbank foreign exchange, the rupee first quoted at 79.20 versus the US dollar before losing ground and closing at 79.25, down 12 paise from the previous level.

The rupee's closing value versus the dollar on Thursday was 79.13. The dollar index, which measures the value of the dollar against a basket of six different currencies, was trading 0.5% lower at 107.07.

"It does not seem that we will get lower levels on the USD/INR pair as the dollar index increases towards 107 and with crude up above USD 100 per barrel," said Anil Kumar Bhansali, Head of Treasury, Finrex Treasury Advisors.

"In any case, the flows won't come as soon as the measures are announced and the markets are feeling upbeat. RBI may take additional unconventional measures to keep the rupee stable "Bhansali tacked on.

Brent crude futures, the global standard for crude oil, increased 0.17 percent to USD 104.83 a barrel. The 30-share Sensex was up 263.94 points, or 0.49 percent, at 54,442.40 on the domestic equities market, while the larger NSE Nifty was up 83.60 points, or 0.52 percent, at 16,216.50.

The RBI on Wednesday announced a number of measures to increase foreign exchange inflows in an effort to stop the depreciation of the rupee, including raising the limits for corporate overseas borrowing and loosening restrictions on foreign investment in government bonds.

In order to maintain the orderly operation of the market, the central bank further stated that it had been attentively and continually monitoring the liquidity conditions in the foreign exchange market and has intervened as needed in all of its sectors to ease dollar tightness.

The US Federal Reserve's meeting minutes from last month revealed a hawkish posture because a rate increase of 75 basis points is anticipated for July. On Wednesday, the minutes were made public. According to stock exchange data, foreign institutional investors were net sellers on Thursday in the capital market as they sold shares worth Rs 925.22 crore.