The rupee declined by 9 paise to settle at 83.19 (provisional) against the US dollar on Tuesday due to dollar buying by importers amid lingering worries over oil supplies through the Red Sea route.

Forex traders said that positive sentiment in the stock market, a weak greenback against major currencies overseas and steady crude oil prices restricted losses in the local currency.

At the interbank foreign exchange market, the local unit opened flat at 83.10 against the greenback and traded between the peak of 83.09 and the lowest level of 83.22. It finally settled at 83.19, registering a loss of 9 paise over its previous close.

Traders said dollar buying by importers following a recent spike in the rupee amid increased FII inflows kept the unit under pressure. On Monday, the domestic currency settled 7 paise lower at 83.10 against the dollar, a day after witnessing a jump of 27 paise on Friday. The rupee breached the 82 level twice this week to touch a high of 82.90.

Traders are also concerned over oil supplies amid attacks by rebel group Houthis on ships. While Maersk on Tuesday announced that it may reroute some of its vessels around Africa's Cape of Good Hope, the US and a host of other nations are creating a new force to protect ships transiting the Red Sea that have come under attack by drones and ballistic missiles fired from Houthi-controlled areas of Yemen.

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was trading 0.04 per cent lower at 102.13 on Tuesday.

Global oil price benchmark Brent crude was almost flat at USD 77.95 per barrel.

In the domestic equity market, the 30-share BSE Sensex settled 122.10 points or 0.17 per cent higher at 71,437.19. The broader NSE Nifty rose 34.45 points or 0.16 per cent at 21,453.10.

Foreign institutional investors (FIIs) were net sellers in the equity market on Monday as they offloaded shares worth Rs 33.51 crore, according to exchange data.