The rupee fell sharply by 15 paise against the US dollar to 83.44 in early trade on Wednesday amid muted trends in the domestic equity markets.

However, a decline in the dollar index and a marginal fall in the Brent crude index prevented further losses in the domestic unit, according to experts.

At the interbank foreign exchange, the local unit opened at 84.38 — down 9 paise from its previous close — and then slid further to 84.44, registering a decline of 15 paise from its previous close.

On Tuesday, the rupee pared its intra-day losses to settle flat at 84.29 against the US dollar.

"The Indian banking liquidity fell into deficit as industry players paid ₹1.6-1.8 lakh crore as GST payment. This was after two months that liquidity has fallen into a deficit as the RBI also intervened into forex markets to defend the rupee weighing on liquidity conditions," Anil Kumar Bhansali, Head of Treasury and Executive Director, Finrex Treasury Advisors LLP, said.

"The rupee may be in the broad range of 84.00 to 84.50 in the near term as markets await a slew of data from the US this evening," Bhansali added.

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was down 0.15 per cent to 106.84.

Brent crude, the global oil benchmark, was marginally down 0.10 per cent to $72.74 per barrel in futures trade.

In the domestic equity market, the 30-share equity benchmark Sensex was trading 46.69 points lower, or 0.06 per cent, at 79,957.57 points.

Foreign Institutional Investors (FIIs) were net buyers in the capital markets on Tuesday, purchasing shares worth ₹1,157.70 crore, according to exchange data.

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