Mumbai, Oct 28 (PTI) The rupee depreciated by 10 paise to close at 88.29 against the US dollar on Tuesday on weak domestic stock markets and foreign fund outflows.

Forex traders said a weak US dollar and softening of crude oil prices cushioned the downside.

Investors are also keeping a watch on the Federal Reserve’s policy decision on Wednesday for further cues.

At the interbank foreign exchange market, the rupee opened at 88.34, and later traded in a range of 88.23 to 88.40 during the day. The local unit finally settled at 88.29 against the greenback, registering a fall of 10 paise from its previous close.

On Monday, the rupee plunged 36 paise to close at 88.19 against the US dollar.

"We expect the rupee to trade with a slight negative bias on weak domestic equities and month-end dollar demand from importers. However, optimism over the trade deal between India and the US may support the rupee at lower levels," said Anuj Choudhary, Research Analyst, Currency and Commodities, Mirae Asset ShareKhan.

Choudhary further noted that investors may remain cautious ahead of the US FOMC meeting decision. USDINR spot price is expected to trade in a range of 87.90 to 88.60, he said.

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, fell 0.09 per cent to 98.69.

Brent crude, the global oil benchmark, fell 1.74 per cent to USD 64.48 per barrel in futures trading.

On the domestic equity markets front, Sensex declined 150.68 points to settle at 84,628.16, while the Nifty dipped 29.85 points to 25,936.20.

Foreign Institutional Investors purchased equities worth Rs 10,339.80 crore on Tuesday, according to exchange data.

Meanwhile, India's crude oil imports from the United States climbed to their highest level since 2022 in October, a move seen as part of New Delhi's effort to diversify supplies away from Russia and ease trade tensions with the Trump administration.

India's crude imports from the US reached 540,000 barrels per day as of October 27 - the highest since 2022, according to data from Kpler.

October is likely to close with near 575,000 bpd, and November looks to book around 400,000-450,000 bpd, per US export data - a sharp jump from the year-to-date average of around 300,000 bpd. PTI DRR TRB TRB

Currency depreciation pressures persist as weak equities, fund outflows, and import demand weigh on the rupee amid policy uncertainty. The rupee depreciated against the US dollar amid weak domestic equities and foreign fund outflows, with month-end importer dollar demand and caution ahead of a US monetary policy decision weighing on the currency. Softer crude prices and a weaker dollar cushioned losses, while optimism over a bilateral trade deal could support the rupee; elevated US-origin crude imports reflect supply diversification that may affect import-driven dollar demand.