The rupee slipped by 5 paise to close at 74.47 (provisional) against the US currency on Tuesday as the dollar strengthened in the overseas markets and the domestic equity indices closed with losses. Forex traders said the rupee is trading in a narrow range as investors are awaiting cues from the US Fed's policy decision due on Wednesday and month-end rebalancing.

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At the interbank foreign exchange market, the local unit opened at 74.36 against the dollar and witnessed an intra-day high of 74.35 and a low of 74.54 during the session. The local unit finally ended the day at 74.47, down 5 paise over its last close. On Monday, the rupee had settled at 74.42 against the US dollar.

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, rose 0.12 percent to 92.76. "The Indian rupee stuck in a small range with thin volume ahead of month-end adjustment. Risk-averse sentiments, a stronger dollar, lower US real interest rate, and weaker Chinese yuan weighed on the Indian rupee. Though, the rupee remained resilient among Asian currency baskets in today's trade following strong dollar inflows in primary markets," said Dilip Parmar, Research Analyst, HDFC Securities.

On the domestic equity market front, the BSE Sensex ended 273.51 points or 0.52 percent lower at 52,578.76, while the broader NSE Nifty declined 78 points or 0.49 percent to 15,746.45. Global oil benchmark Brent crude advanced 0.39 percent to USD 74.79 per barrel in futures trade.

Meanwhile, foreign institutional investors were net sellers in the capital market on Monday as they offloaded shares worth Rs 2,376.79 crore, as per exchange data.