NEW DELHI: The rupee declined by 16 paise to settle at 85.58 against the US dollar on Tuesday, weighed down by weak domestic equity markets and a rise in US Treasury yields. The drop marked a reversal from Monday’s gain, when the rupee had appreciated by 15 paise to close at 85.42.Currency dealers attributed the pressure on the rupee to the recent uptick in the US 10-year Treasury yield, which reflects mounting concerns over fiscal and monetary policy outlooks in the US and is contributing to higher global borrowing costs. Additionally, continued outflows of foreign investment and elevated crude oil prices added to the strain on the domestic currency, though a weaker US dollar index helped contain further losses, reported PTI.At the interbank foreign exchange market, the rupee opened at 85.47 and moved between an intraday high of 85.39 and a low of 85.65 before settling at 85.58. “We expect the rupee to trade with a negative bias amid FII outflows and weak domestic markets. However, a declining US dollar index may support the rupee at lower levels,” said Anuj Choudhary, Research Analyst at Mirae Asset Sharekhan, adding that the USD-INR spot rate is likely to move within the 85.30 to 85.90 range in the near term.The US dollar index, which tracks the greenback’s performance against six major global currencies, fell by 0.19 per cent to 100.23.Dilip Parmar, Senior Research Analyst at HDFC Securities, noted that the rupee has recently emerged as one of the weakest currencies in Asia. “This depreciation is attributed to concerns over rising Covid-19 cases in parts of Asia, persistent foreign fund outflows from Indian equities, higher global bond yields, and dampened market sentiment,” he said.Brent crude futures, the global oil benchmark, slipped 0.14 per cent to USD 65.45 per barrel, offering some relief on the import cost front.On the equity front, the domestic markets remained under pressure. The 30-share BSE Sensex plunged 872.98 points, or 1.06 per cent, to close at 81,186.44, while the broader NSE Nifty declined 261.55 points, or 1.05 per cent, to end at 24,683.90.According to exchange data, foreign institutional investors (FIIs) offloaded Indian equities worth a net Rs 525.95 crore on Monday, contributing to the rupee’s downward pressure.