The Indian rupee extended decline in opening trades on Tuesday tracking broad gains in the US dollar overseas. The dollar index is hovering above 98 mark as investors assessed recent trade deals between the United States, Japan, and the European Union. Investors now turn focus to the outcome of a two-day FOMC policy meeting on Wednesday for further cues. INR opened at Rs 86.76 per dollar and dropped to a low of 86.88, a 5-month low so far during the day. Yesterday, rupee pared initial gains and settled for the day 15 paise lower at 86.67 against the US dollar. Moreover, a negative trend in the domestic equity markets dented investors' sentiments further. Indian shares fell notably on Monday as caution prevailed ahead of the U.S. tariff deadline set to take effect later this week. The benchmark BSE Sensex tumbled 572.07 points, or 0.70 percent, to 80,891.02, with selling seen across sectors. The broader NSE Nifty index dropped 156.10 points, or 0.63 percent, to 24,680.90. Meanwhile, investors also remained cautious ahead of the US Federal Reserve and Bank of Japan's monetary policy decisions. On the NSE, USDINR ended at 86.57, up 0.17% on the day.