More Stories

Informist, Tuesday, Dec. 2, 2025

 

By Kabir Sharma

 

MUMBAI – The rupee ended at a record closing low against the dollar Tuesday as demand for the greenback from importers and foreign portfolio investors remained firm, dealers said. The rupee fell for the fifth consecutive trading session on Tuesday, touching record lows, as banks continued to purchase dollars for importers amid uncertainty following Monday's sharp volatility. "Yesterday (Monday) was a wake-up call to the market. People are looking to stock up on dollars, as and when possible now," a dealer at a state-owned bank said. 

 

After touching a record low of 89.9525 a dollar, the Indian unit ended the day at 89.8700 a dollar, sharply down from 89.5475 a dollar on Monday. 

 

As the rupee approached the psychologically crucial 90-per-dollar level, public sector banks stepped in to sell dollars, likely on behalf of the Reserve Bank of India, which prevented the Indian unit from falling further, dealers said. However, the central bank's dollar sales were not aggressive, prompting caution among traders.

 

Dealers had expected the 89.80 a dollar level to be strong support for the rupee, but it was breached within a couple of hours of trade, triggering panic among market participants. "The pair is crossing all crucial levels very easily. The support and resistance are difficult to guess now," the dealer said.

 

Market participants estimated that the RBI sold around $1 bln – $1.5 bln in the currency market on Tuesday. The central bank sold dollars around the 89.95-a-dollar level, a whisker away from the 90-per-dollar mark. "We expect RBI to actively intervene to cap USD/INR, but we think the fundamentals ultimately imply some pressure for INR to weaken, and as such for RBI to eventually allow USD/INR to break above 90 over time," MUFG Bank said in a note. 

 

Following Monday's trend, the rupee came under pressure as banks bought dollars to cover foreign fund outflows from Indian equities, dealers said. The Nifty 50 and the Sensex both ended 0.6% lower each on Tuesday. According to National Stock Exchange data, foreign portfolio investors net sold shares worth INR 11.71 billion on Monday.  

 

The dollar also remained firm on Tuesday, offering no respite to the rupee, dealers said. The dollar rebounded from Monday's lows even as the US manufacturing purchasing managers' index for November came in weaker than expected. The manufacturing PMI fell to 48.2 in November, compared with the consensus estimate of 48.6 and 48.7 in October, according to a poll by FX Street. 

 

According to the CME FedWatch tool, there is an 87.2% chance that the Fed will cut interest rates by 25 basis points to 3.50%-3.75% in December. For more cues on the Fed's monetary policy, investors will focus on the US ADP employment data and the ISM services PMI for November, to be released Wednesday. 

 

	AT 1530 IST	AT 0900 IST	HIGH	LOW	PREVIOUS(AT 1530 IST)
Spot rupee per $1	89.8700	89.7000	89.7000	89.9525	89.5475
1-year dlr/rupee fwd (paise)	208.19	203.29	209.32	203.29	202.77

 

FORWARDS

The one-year dollar-rupee forward premium jumped to an over nine-week high as banks bought dollars for forward delivery on behalf of importers who feared further depreciation of the Indian unit after it slumped to a record low Tuesday, dealers said. 

 

The lack of dollar-rupee buy-sell swaps by the Reserve Bank of India to neutralise the impact of its spot intervention and avert drain on the rupee liquidity also supported forward premiums, dealers said. The central bank likely sold dollars in the spot market Tuesday to keep the Indian unit from falling past the 90-per-dollar mark, they said. 

 

However, a rise in US Treasury yields Monday limited gains for forward premiums, they said. US yields rose due to weakness in Japanese and European government bonds, after Bank of Japan Governor Kazuo Ueda indicated that conditions were aligning for a possible rate hike. 

 

At 1530 IST, the one-year exact period dollar/rupee forward premium was 2.31%, up from 2.26% Monday. On an absolute basis, the premium was 208.19 paise, against Monday's close of 202.77 paise.

 

OUTLOOK

On Wednesday, dealers will closely monitor Indian equities and foreign investor flows. The rupee will also take cues from movements in the dollar index and other Asian currencies. Dollar demand from importers will remain key, dealers said. 

 

Market participants will also keep an eye on the India-US trade deal talks, dealers said. MUFG said it expects an eventual trade deal between the US and India, with tariffs lowered to 25% from 50% by early 2026. However, "if a trade deal between the US and India to lower tariffs is not reached, the bias would tilt towards further INR weakness and more RBI rate cuts, even as India's domestic economy should continue to cushion India's overall GDP," the report said. 

 

Going forward, the major trigger for the Indian Rupee will be the Reserve Bank of India's monetary policy announcement on Friday. Market participants are divided over whether the RBI will cut interest rates at its last policy meeting of the year, amid strong GDP growth and inflation well below the central bank's tolerance range of 2-6%.

 

Wednesday, the rupee is expected to move in a range of 89.70 to 90.00 against the dollar. Immediate technical resistance for the rupee is pegged at 89.70 per dollar and support at 90.00.

---

India Rupee: Premium at 9-week high; importers buy fwd dlrs as rupee slumps

 

	AT 1310 IST	AT 0900 IST	HIGH	LOW	PREVIOUS(AT 1530 IST)
Spot rupee per $1	89.8400	89.7000	89.7000	89.9525	89.5475
1-year dlr/rupee fwd (paise)	209.32	203.29	209.32	203.29	202.77

 

NEW DELHI – The one-year dollar-rupee forward premium jumped to an over nine-week high as banks bought dollars for forward delivery, on behalf of importers, who fear further depreciation in the Indian unit after it slumped to a record low Tuesday, dealers said. The rupee hit a lifetime low of 89.9525 a dollar Tuesday, not too far from the psychologically-crucial 90-per-dollar level. 

 

"Importer hedging has definently picked up after the sharp move in rupee," a dealer at a private sector bank said. "I was expecting some recieving to come at these levels, but it has not been seen so far."  

 

Lack of dollar-rupee buy-sell swaps by the Reserve Bank of India, in order to neutralise the impact of its spot intervention and avert pushing out rupee liquidity, also supported forward premiums, dealers said. The central bank likely sold dollars in the spot market Tuesday to keep the Indian unit from falling past the 90-per-dollar mark, they said. 

 

However, a rise in US Treasury yields Monday limited gains for forward premiums, they said. US yields rose due to weakness in Japanese and European government bonds, after Bank of Japan Governor Kazuo Ueda indicated that conditions were aligning for a possible rate hike. 

 

Market participants now await the RBI's Monetary Policy Committee's decision Friday. A surprisingly sharp rise in GDP growth in the September quarter has led to divergence among participants about the interest rate decision this week, with some still expecting a rate cut.

 

At 1310 IST, the one-year exact period dollar/rupee forward premium was 2.33%, up from 2.26% Monday. On an absolute basis, the premium was 209.32 paise, against Monday's close of 202.77 paise.  (Pratiksha)

---

India Rupee: Slumps to lifetime low; RBI's intervention keeps 90/$1 at bay

 

	AT 1223 IST	AT 0900 IST	HIGH	LOW	PREVIOUS(AT 1530 IST)
Spot rupee per $1	89.9325	89.7000	89.7000	89.9525	89.5475

 

NEW DELHI – The rupee slumped to a record low of 89.9525 a dollar as banks continously bought dollars on behalf of importers, fearing a further fall in the Indian unit, dealers said Tuesday. However, the Reserve Bank of India's intervention through dollar sales ensured the Indian currency does not test the psychologically-crucial 90-per-dollar, they said. 

 

"There is no respite in buying (of dollars) in the market. Everybody is buying," a dealer at a private-sector bank said. "I am expecting RBI will continue to sell above 89.90 (a dollar) and not let 90.00 happen so soon."

 

The central bank likely sold dollars below 89.90 a dollar, to prevent the rupee from falling past 90.00 a dollar, dealers said. However, the RBI's dollar sales were not aggressive in nature, they said.

 

Some banks also sold dollars on behalf of exporters, who wanted to make the most of the relatively higher dollar-rupee levels, which also provided cushion to the Indian unit, dealers said. "Some exporters have started selling (dollars) but not a lot of them are there," a dealer at a state-owned bank said. "Only the ones who don't expect 90 (a dollar) to happen are here."

 

For the rest of the day, the rupee is seen moving between 89.70 and 90.00 against the greenback. Dealers peg strong technical support for the rupee at 90.00 a dollar. (Pratiksha)

---

India Rupee: Technical levels for rupee - Dec 2

 

NEW DELHI – At 1145 IST, the rupee was at 89.8950 per dollar. At 0900 IST, the rupee was at 89.7000 a dollar, against the previous close of 89.5475 a dollar. Following are the key support and resistance levels for the rupee as provided by leading banks and brokerages:

 

Participants	S2	S1	R1	R2
State-owned bank	89.40	89.00	89.30	89.10
Brokerage firm	89.20	89.00	89.30	89.00
Brokerage firm	89.50	89.00	89.00	88.80

 

(Pratiksha)

---

India Rupee: Hits record low as importers buy dlrs; RBI dlr sales speculated

 

	AT 0950 IST	AT 0900 IST	HIGH	LOW	PREVIOUS(AT 1530 IST)
Spot rupee per $1	89.7700	89.7000	89.7000	89.8525	89.5475

 

NEW DELHI – Continuing its weak momentum from Monday, the rupee fell to a record low against the dollar Tuesday as banks persistently bought dollars on behalf of importers, dealers said. The Indian currency hit a lifetime low of 89.8525 a dollar shortly after opening. "There are a lot of bids (dollar buying) in the market after yesterday's movement," a dealer at a private sector bank said. "But I was not expecting such a move (in rupee) so soon."

 

Importers bought the greenback, fearing further weakness in the Indian unit, dealers said. Meanwhile, some dealers speculated that the Reserve Bank of India may be selling dollars around 89.85 a dollar, in order to prevent the rupee from testing the psychologically-crucial 90-per-dollar mark. Most dealers had expected the central bank to protect the 89.80 level, a breach of which led to further weakness in the Indian unit, according to dealers.  

 

A rise in US Treasury yields on Monday also weighed on the local unit, dealers said. The 10-year US bond yield rose to 4.09% Monday from 4.02% Friday. 

 

For the rest of the day, the rupee is seen moving between 89.60 and 90.00 against the greenback. Dealers peg strong technical support for the rupee at 90.00 a dollar. (Pratiksha)

---

India Rupee - Asia FX: Mixed ahead of Fed decision; South Korean won steady

 

NEW DELHI – Asian currencies moved on a mixed note against the dollar as traders awaited the outcome of the US Federal Open Market Committee's decision next week, when it is expected to cut rates by 25 basis points.

 

Data released Monday showed manufacturing in the US contracted for the ninth straight month in November, as the Institute for Supply Management's manufacturing purchasing managers' index dropped to 48.2 in November from 48.7 a month earlier. The weak economic data boosted expectations of a rate cut by the US Federal Reserve next week. Fed funds futures are pricing in an 88% probability of a 25 bps cut at the US central bank's next meeting decision on Dec. 10, according to the CME Group's FedWatch tool. Investors are now waiting for a delayed September report on the Personal Consumption Expenditures Price Index, the Fed's preferred inflation gauge, due on Friday.

 

The South Korean won was flat against the dollar even after US Commerce Secretary Howard Lutnick Tuesday said Washington would lower import duties on South Korean autos to 15?fective retroactively from Nov. 1 and match the reciprocal tariffs imposed on Japan and the European Union. Meanwhile, South Korea's inflation rose 2.4% in November from a year earlier, same as the previous month, boosting the case for the Bank of Korea to maintain interest rates at the current level for longer. 

 

The Thai baht was also steady against the dollar. Finance Minister Ekniti Nitithanprapas said Monday that the country's overall economy is likely to see only a minimal impact from recent flooding in the south. The floods killed more than 170 people across eight southern provinces.

 

The Indonesian rupiah rose 0.1% against the dollar even after the country posted a smaller-than-expected trade surplus in October after exports unexpectedly fell. The surplus stood at $2.4 billion, smaller than the $3.72 billion forecast by economists polled by Reuters and September's $4.34-billion surplus. It was the smallest monthly surplus since April, official data showed Monday. 

 

The Malaysian ringgit was steady against the dollar, while the Philippine peso rose 0.2%. (Pratiksha) 

---

India Rupee: Expected range for rupee - Dec 2

 

NEW DELHI – Following are the expected support and resistance levels for the rupee on Tuesday, as forecast by leading banks and brokerages in an Informist poll: 

 

PARTICIPANT	SUPPORT	RESISTANCE
State-owned bank	89.80	89.40
State-owned bank	89.80	89.50
Private-sector bank	89.80	89.50
Private-sector bank	89.80	89.30
Foreign bank	89.80	89.30
Brokerage firm	89.85	89.35
Brokerage firm	89.83	89.49

 

 

 

 

 

 

 

 

 

 

(Pratiksha)

 

End

 

US$1 = INR 89.87

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Edited by Saji George Titus

 

For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.

 

Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd. by NSE Data & Analytics Ltd., a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt. Ltd.

 

Informist Media Tel +91 (22) 6985-4000

Send comments to feedback@informistmedia.com

 

© Informist Media Pvt. Ltd. 2025. All rights reserved.