Mumbai | The rupee depreciated 7 paise to close at 95.68 (provisional) against the US dollar on Tuesday, weighed down by elevated crude oil prices and lingering geopolitical tensions in West Asia.

Forex traders said the USD/INR pair is likely to trade with a slight negative bias, pressured by the delay in the deal between the US and Iran, rising crude oil prices and broader dollar support.

At the interbank foreign exchange, the rupee opened at 95.68 against the greenback and traded in a range of 95.64-95.69 during the session. It eventually settled at 95.68 (provisional), lower by 7 paise from its previous close.

On Monday, the rupee depreciated 19 paise to close at 95.61 against the US dollar.

"With Brent crude rising above USD 90/bbl and the reopening of the Strait of Hormuz remaining unresolved, oil prices will remain a key monitorable for the rupee, inflation and foreign flows," said Siddhartha Khemka - Head of Research, Wealth Management, Motilal Oswal Financial Services Ltd.

Moreover, weak global cues and FII selling weighed on sentiment, with FIIs selling equities worth Rs 2,535 crore on Monday, their highest selling in three weeks, Khemka said, adding that "the US 10-year Treasury yield remained elevated".

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was trading at 99.60, down 0.04 per cent.

Brent crude, the global oil benchmark, was trading higher by 0.01 per cent at USD 90.88 per barrel in futures trade.

Overall, elevated crude prices, geopolitical uncertainty and foreign selling are likely to keep near-term sentiment subdued, while resilient domestic fundamentals and continued policy support could provide a constructive medium-term backdrop, Khemka said.

On the domestic equity market front, Sensex tanked 492.70 points to settle at 77,235.46, while the Nifty fell 132.75 points to close at 24,154.90.

Foreign institutional investors offloaded equities worth Rs 2,535.10 crore on a net basis on Monday, according to exchange data.