Rupee declines 13 paise to 79.95 against US dollar on rate hike worries

The rupee declined by 13 paise to close at 79.95 against the US currency on Wednesday as growing expectations of aggressive interest rate hikes by the US Fed drove the greenback to multi-year highs against major global currencies.

Forex inflows into equities and weak crude oil prices, however, restricted losses in the local currency.

At the interbank foreign exchange market, the domestic currency opened at 79.93 per dollar. It hovered in a range of 79.84 to 79.9550 during the session.

The domestic unit finally settled at 79.95, down 13 paise over its previous close of 79.82.

Anuj Choudhary - Research Analyst at Sharekhan by BNP Paribas said that a strong dollar overseas hit the rupee sentiment.

The US Dollar surged as economic data from the US surprised the markets. The US ISM services PMI unexpectedly rose to 56.9 in August from 56.7 in July.

"We expect Rupee to remain weak on strong US Dollar and weak cues from global markets. Dollar index surged to a fresh 20-year high and is