The rupee stayed flat at 83.03 against the US dollar in early trade on Tuesday amid volatile crude oil prices in the overseas market.

The Indian currency, however, found support from positive sentiment in the domestic equity markets and sustained inflow of foreign funds, forex traders said.

They also said investors are expected to move cautiously ahead of the Reserve Bank's monetary policy committee (MPC) meeting. The six-member rate-setting panel of the central bank will begin the deliberation on Tuesday and announce the outcome on Thursday.

At the interbank foreign exchange, the rupee opened at 83.03 against the dollar and slipped to 83.04 before retaining the previous day's closing level of 83.03 against the greenback.

The rupee settled 5 paise lower at 83.03 against the dollar on Monday.

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was trading marginally lower by 0.04 per cent at 104.28.

Analysts attributed the higher level of the US currency to the recent macroeconomic data which showed a steady growth in the world's largest economy.

Brent crude futures, the global oil benchmark, declined 0.08 per cent to USD 78.05 per barrel.

In the domestic equity market, the 30-share BSE Sensex was trading 112.49 points or 0.16 per cent higher at 71,843.91. The broader NSE Nifty advanced 35.70 points or 0.16 per cent to 21,807.4.

Foreign Institutional Investors (FIIs) were net buyers in the capital markets on Monday as they purchased shares worth Rs 518.88 crore, according to exchange data.

A monthly survey released on Monday showed India's services sector growth rose to a six-month high in January as new business expanded at a faster pace amid buoyant demand from domestic and external clients.

The seasonally adjusted HSBC India Services PMI Business Activity Index rose to 61.8 in January, up from 59 in December.

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