Mumbai, March 11 The rupee declined by 16 paise to settle at 92.01 (provisional) against the US dollar on Wednesday, weighed down by a sharp rise in global crude oil prices and a stronger US dollar amid the ongoing war in West Asia.
Forex traders attributed the decline to further outflows from foreign institutional investors and weak sentiment in the domestic equity markets.
At the interbank foreign exchange market, the rupee opened at 91.92 against the US dollar and traded in the range of 91.85-92.06 before settling at 92.01 (provisional), down 16 paise from its previous close.
The rupee staged a strong recovery from its record low against the US dollar on Tuesday, gaining 36 paise to settle at 91.85.
"The rupee declined due to weak domestic markets and the overnight recovery in crude oil prices. Risk-off sentiment in global markets and FII outflows may continue to weigh on the rupee. The market will also be watching geopolitical developments in West Asia," said Anuj Choudhary, Research Analyst, Mirae Asset ShareKhan.
"Traders may take cues from the US CPI data. The USD-INR spot price is expected to trade in the range of 91.70-92.40," he added.
The dollar index, which gauges the strength of the US dollar against a basket of six currencies, was trading 0.14 per cent higher at 98.96.
Brent crude, the global oil benchmark, was trading higher by 5.44 per cent at USD 92.58 per barrel in futures trade.
On the domestic equity market front, the Sensex tumbled by 1,342.27 points to settle at 76,863.71, while the Nifty plummeted by 394.75 points to 23,866.85.
Foreign institutional investors sold equities worth Rs 4,672.64 crore on a net basis on Tuesday, according to exchange data.