The rupee declined by 21 paise to close at 79.73 against the US dollar on Thursday, weighed down by a firm American currency and a negative trend in domestic equities.

At the interbank foreign exchange market, the domestic currency opened at 79.53 per dollar. It hovered in a range of 79.44 to 79.73 during the session.

The domestic unit finally settled at 79.73, down 21 paise over its previous close of 79.52.

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was trading 0.09 per cent lower at 109.56.

Brent crude futures, the global oil benchmark, fell by 0.96 per cent to $93.20 per barrel.

On the domestic equity market front, the BSE Sensex ended 412.96 points or 0.68 per cent lower at 59,934.01, while the broader NSE Nifty declined 126.35 points or 0.7 per cent to 17,877.40.

Foreign Institutional Investors (FIIs) were net sellers in the capital markets, as they offloaded shares worth ₹1,397.51 crore on Wednesday, according to provisional data.

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On the macroeconomic front, India's exports rose marginally by 1.62 per cent to $33.92 billion, while the trade deficit more than doubled to $27.98 billion in August due to increased crude oil imports, the commerce ministry data showed on Wednesday.

The revised data showed that imports rose by 37.28 per cent to $61.9 billion in August this year.

Fitch Ratings, on Thursday, slashed India's GDP growth projection for FY23 to 7 per cent, saying the economy is expected to slow down against the backdrop of global economy, elevated inflation, and high interest rate.