The rupee declined by 3 paise to settle at 82.92 (provisional) against the US dollar on Wednesday, tracking bearish equity markets and foreign fund outflow amid increased month-end demand for the American currency.

Forex analysts said that softening crude oil prices provided a cushion to the Indian currency which was weighed down by a stronger dollar.

Also, market participants were cautious ahead of the domestic GDP data to be released on Thursday and the US GDP numbers expected on Wednesday, they said.

At the interbank foreign exchange market, the local unit opened at 82.90 and touched the intra-day low of 82.95 against the greenback. The local unit finally settled at 82.92 (provisional) against the dollar, registering a loss of 3 paise from its previous close.

On Tuesday, the rupee settled 1 paisa lower at 82.89 against the US dollar.

Anuj Choudhary, Research Analyst, Sharekhan by BNP Paribas, said the Indian rupee fell on weak domestic markets and a strong US dollar, however, softening crude oil prices cushioned the downside.

"We expect rupee to trade with a slight negative bias on weak global equities and month-end dollar demand from importers and OMCs (oil marketing companies).

"Traders may take cues from Q4 GDP data (2nd estimates) from the US. Investors may remain cautious ahead of inflation data from the US this week. USD-INR spot price is expected to trade in a range of Rs 82.70 to Rs 83.10," Choudhary said.

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was 0.37 per cent higher at 104.21.

Brent crude futures, the global oil benchmark, declined 0.92 per cent to USD 82.88 per barrel.

On the domestic equity market front, Sensex plunged 790.34 points, or 1.08 per cent, to settle at 72,304.88 points. The Nifty tumbled 247.20 points, or 1.11 per cent, to close at 21,951.15 points.

Foreign institutional investors (FIIs) were net sellers in the capital markets on Tuesday as they sold shares worth Rs 1,509.16 crore on a net basis, according to exchange data.

Except for the headline, this story has not been edited by The Telegraph Online staff and has been published from a syndicated feed.