The rupee declined by 19 paise to close at 86.23 (provisional) against the greenback on Tuesday, weighed down by a rise in global crude oil prices amidst the escalating Iran-Israel war, and a strengthening dollar.

Weak sentiments in the domestic equity markets and Foreign Institutional Investor (FII) outflows put further pressure on the rupee, according to forex traders. At the interbank foreign exchange, the rupee opened at 85.96 against the US dollar and traded in the range of 85.96-86.28 during the day before settling at 86.23 (provisional), down 19 paise from its previous close. The rupee had closed at 86.04 against the dollar on Monday.

"As rupee closes below 86.20 we can expect it to fall to 86.70 levels before any recovery. Dollar selling has been restricted for now with the war and is taking a toll on risk and the greenback is getting bought as the tariff issue becomes secondary. Trump also said pharma tariffs will be coming soon, spooking pharma stocks of India and FPIs selling continuously," Anil Kumar Bhansali, Head of Treasury and Executive Director, Finrex Treasury Advisors LLP, said.