The Indian rupee continued to make substantial gains on the back of the continued inflow of the foreign funds into the Indian markets.

The domestic currency, on Monday, closed 26 paise higher from its previous close at 69.89, against US Dollar. 

In the early morning trade, rupee had gained 28 paise, after opening higher on 70.01 against the greenback.

During the day's trade rupee value against the US dollar oscillated between 69.86 and 70.01 at the Interbank Forex Markets.

In the previous session on Friday, the rupee was down 14 paise to close at 70.14. On a weekly basis, however, the domestic currency clocked 78 paise gains.

Analysts attribute the phenomenon to the increased inflow of the foreign investors in the Indian markets.

"The only reason I can understand as of now, its the consistent flow of foreign funds in the Indian markets," said Madan Sabnavis, Chief Economist, Care Ratings.

Foreign Institutional Investors (FIIs), yet again, deposited a whopping Rs 3,810.60 crore in the Indian markets on Monday, on back of the positive macro indicators. This is the 13th consecutive sessions where foreign funds have been net buyers in the Indian markets.

The Financial Benchmark India Private Ltd (FBIL) set the reference rate for the rupee against the dollar at 69.9308 and against euro at 78.5710. The reference rate for the rupee against the British pound was fixed at 90.7916 and against 100 Japanese yen at 62.93.

On the other hand, the US dollar index -- a measure of the value of the American currency relative to a basket of key foreign currencies -- was marginally higher at 97.3220.

The rupee has been appreciating on back of fund inflow, despite the rise in the oil prices in the global markets. Brent crude futures, the global oil benchmark, rose 1.03% to $66.42 per barrel.