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The rupee recovered sharply from its record low level on Thursday to end at 89.90 against the US dollar, on likely intervention from the Reserve Bank of India (RBI) to curb the steep decline in the currency.
The domestic currency gained 29 paise to close at 89.90 against the greenback, compared to the previous close of 90.19. The rupee plunged to a fresh all-time low of 90.43 during the intraday trade after opening at 90.36.
“The Indian rupee reversed its six-day losing streak, appreciating against the US dollar. This upturn is primarily attributed to likely intervention by the central bank and the unwinding of speculative positions,” said Dilip Parmar, Research Analyst, HDFC Securities.
The RBI’s intervention in the spot market was seen around the 90.30-90.40 levels, forex market analysts said.
“Market participants speculated that the RBI may have executed a sell–buy swap, which not only supplied dollars in the spot market but also helped smooth volatility without draining reserves outright. This intervention lifted the rupee off its record lows,” said Dipti Chitale, CEO, Mecklai Financial Services Pvt Ltd.
Forward premiums continued to rise, reflecting increased interest deferential and hedging demand.
“Adding to the move, the dollar index (DXY) weakened as markets began pricing in a Fed rate cut expected next week. The softer dollar globally provided additional support to the rupee’s recovery,” she said. The DXY, which gauges the greenback’s strength against a basket of six currencies — euro, Swiss franc, Japanese yen, Canadian dollar, British pound and Swedish krona — fell to 98.78 on Thursday, compared to the previous close of 98.85.
According to HDFC Securities’ Parmar, the rupee’s underlying bias remains unsupportive, burdened by sustained foreign fund outflows and an elevated trade deficit. On Thursday, foreign portfolio investors (FPIs), sold Rs 4,752.4 crore of domestic equities, compared to Rs 4,033.46 crore sold the previous day. So far in the current year (2025), foreign investors have offloaded Rs 13,121 crore of local shares, according to the National Securities Depository Ltd (NSDL) data.
In the near term, the spot USD/INR pair faces technical resistance at 90.45 and support at 89.70, Parmar said.
Market participants will closely watch Reserve Bank of India Governor Sanjay Malhotra’s remarks on the rupee in his policy address on Friday (December 5).
