The rupee declined by 7 paise to close at 79.93 (provisional) after moving in a narrow range against the US dollar on Thursday.

At the interbank foreign exchange market, the domestic currency opened at 79.80 per dollar. It hovered in a range of 79.80 to 79.93 during the session.

The domestic unit finally settled at 79.93, down 7 paise over its previous close of 79.86.

"The Indian rupee stayed in a narrow range and underperformed among Asian currencies. China's stimulus to boost the economy supported regional peers while the local unit remained under pressure following high crude oil prices and risk-off moods at the domestic bourses," said Dilip Parmar, Research Analyst, HDFC Securities.

Parmar further said that Spot USD/INR, in the near term, is expected to trade in the range of 79.60 to 80.10 ahead of monthly rebalancing tomorrow.

Meanwhile, the dollar index, which measures the greenback's strength against a basket of six currencies, was down 0.50 per cent at 108.13.

Brent crude futures, the global oil benchmark, advanced 0.39 per cent to USD 101.61 per barrel.

Forex traders said market participants remained cautious ahead of the speech by the Federal Reserve chairman at the Jackson Hole symposium.

On the domestic equity market front, the BSE Sensex ended 310.71 points or 0.53 per cent lower at 58,774.72, while the broader NSE Nifty declined 82.50 points or 0.47 per cent to 17,522.45.

Foreign institutional investors (FIIs) remained net buyers in the capital markets, as they purchased shares worth Rs 23.19 crore on Wednesday, according to provisional data.