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Informist, Tuesday, Dec. 16, 2025

By Pratiksha

NEW DELHI – After a highly volatile trading day, the rupee ended below the psychologically-crucial 91-per-dollar mark on Tuesday as banks heavily bought dollars on behalf of foreign portfolio investors and importers amid looming uncertainty over the India-US trade deal, dealers said. The Indian currency was also dragged down by dollar demand for maturity of positions in the non-deliverable forwards market and lack of intervention by the Reserve Bank of India through dollar sales, they said.

"There was demand (for dollars) all across the market. It was all very spontaneous after 90.80 and then 90.90 was broken," a dealer at a private-sector bank said. "After a point, market just made peace with these levels."

Intraday, the rupee fell below the 91.00-a-dollar level to a record low of 91.0775 a dollar, just eight trading days after breaching the 90.00-a-dollar level. The Indian currency ended the day at a record closing low 91.0275, sharply lower than 90.7300 on Monday. During the day, the rupee moved in a range of 32 paise. 

The rupee started the day lower against the dollar as risk sentiment has been dampened by the prolonged delay in the India-US trade deal, dealers said. On Monday, Commerce Secretary Rajesh Agrawal said the government was "very close" to securing a "framework" deal with the US that would help lower Washington's 50% tariff on goods exports from India. However, Agrawal said he could not give a specific timeline for the deal to be signed.

On Tuesday, Informist, quoting a commerce ministry official, reported that chief negotiators from India and the US have concluded their discussions on the proposed Bilateral Trade Agreement and the remaining issues now require intervention at the ministerial level, including the commerce minister and the prime minister.

The Indian currency was also weighed down by strong dollar demand for maturity of positions in the non-deliverable forwards market, dealers said. Banks also rushed to buy dollars on behalf of oil marketing companies and other importers, which exerted downward pressure on the rupee, they said. Importers bought the greenback with a sense of panic, fearing further depreciation in the Indian currency, dealers said. 

Banks also continuously bought dollars on behalf of foreign portfolio investors looking to pull out funds from Indian markets, dealers said. So far in December, FPIs have net withdrawn $2.44 billion from Indian markets. Strong outflows coupled with dollar demand from importers led to stop-losses being triggered on short dollar bets around 90.90, dragging the rupee below the 91.00 mark and hitting a lifetime low, they said.

"Absence of RBI intervention, delays in the India–US trade deal, and continued FII outflows have weighed on the currency," Jateen Trivedi, vice president research analyst - commodity and currency, LKP Securities, said in a note. "Elevated gold and silver prices have further strained the import bill."

Dealers said the rupee's fall below 91.00 was not a surprise move, since the central bank's recent intervention strategy indicated a hands-off approach. "Rupee was depreciating consistently every day, so today's move was not out of the blue," a dealer at a private-sector bank said. The Indian currency fell for the fifth consecutive trading session on Tuesday.

The central bank was missing in action for most part of the day and did not intervene actively through dollar sales to curb the fall in the currency, dealers said. This indicates the RBI is tolerant to weakness in the rupee amid the hefty 50% US tariffs on India given the still elusive trade deal between Washington and New Delhi, they said.

Some banks sold dollars, likely on behalf of exporters, looking to make the most of the relatively higher dollar-rupee rates, which supported the local unit, dealers said. However, most exporters kept on the sidelines, expecting the rupee to depreciate further, they said.

Though the dollar index hovered close to a two-month low ahead of a slew of economic data, including the delayed November US jobs report later in the day, it did not provide relief to the rupee, dealers said. At 1530 IST, the dollar index, which measures the strength of the dollar against a basket of six major currencies, was at 98.21, down from 98.25 Monday and 98.39 Friday. The index on Monday fell to 98.14, its lowest level since Oct. 17.

FORWARDS 

The one-year dollar-rupee forward premium ended slightly higher due to strong demand from corporates and banks at the RBI's $5 billion dollar-rupee buy-sell swap auction held earlier in the day, dealers said.

The central bank set a cut-off premium of 765.00 paise at the auction of its three-year $5 billion dollar-rupee buy-sell swap. Of the 222 bids worth $10.35 billion received, the RBI accepted 118 bids worth $5.07 billion at the swap auction.

Further, some banks bought dollars for near-term forward delivery on behalf of importers, noting the sharp depreciation in the rupee, which supported the premiums, dealers said. At 1530 IST, the one-year exact period dollar-rupee forward premium was 2.67%, higher than Monday's close of 2.66%. On an absolute basis, the premium was 243.03 paise, against Monday's close of 241.15 paise. 

OUTLOOK

On Wednesday, the rupee may track the movement of the dollar index after the US jobs data is released, dealers said. However, most market participants expect the rupee to stay under pressure as importers may continue to buy dollars fearing further weakness in the rupee, dealers said.

Further, lack of intervention by the RBI may also continue to weigh on the local currency, they said. FPIs may continue to pull out funds from Indian markets as the outlook on India-US trade deal remains clouded, they said.

Market participants will also closely monitor developments related to the India-US trade deal. "I think a lot of speculators have entered the market with all this sharp movement in the rupee," a dealer at another private-sector bank said. "If there is no clarity on the trade deal, speculative bets will only increase."

The rupee is likely to move in a range of 90.80 and 91.30 against the dollar. Immediate technical support for the rupee is pegged at 91.10.

India Rupee - World FX: Dollar index near 2-month low before US jobs data; euro up

NEW DELHI – The dollar index hovered close to a two-month low ahead of the release of a slew of economic data, including the delayed November US jobs report later in the day. The Bureau of Labor Statistics will release its long-awaited combined employment reports for October and November, following delays to data collection during the longest US government shutdown in history. Reports on US business activity and inflation are also due this week.

At 1440 IST, the dollar index, which measures the strength of the dollar against a basket of six major currencies, was at 98.24, down from 98.25 Monday and 98.39 Friday. The index fell to 98.14 on Monday, its lowest level since Oct. 17.

The euro was up 0.1% against the dollar. Data released Tuesday showed French private sector business growth slowed in December, with the HCOB France composite flash Purchasing Managers' Index for December falling to 50.1 points from 50.4 in November. The reading was just above the 50.0 mark that separates growth from contraction.

The pound sterling was up 0.1% even after data Tuesday showed the UK's jobs market saw further signs of weakening ahead of last month's budget announcement by Finance Minister Rachel Reeves. The jobless rate rose to 5.1% in the three months to October from 5.0% in the third quarter - the highest since the three months to January 2021.

The yen rose 0.2% against the greenback after Japan's manufacturing activity contracted at a slower pace in December. The S&P Global flash Japan manufacturing PMI rose to 49.7 from 48.7 in November, extending the contraction for the sixth straight month. The service sector lost some steam in December, with the flash Japan services PMI slightly down to 52.5 in December from 53.2 in November. The Australian dollar was flat against the dollar. (Pratiksha) 

India Rupee: Fwd premium steady before RBI's buy-sell FX swap auction result

NEW DELHI – The one-year dollar-rupee forward premium was largely steady ahead of the result of the Reserve Bank of India's $5 billion dollar-rupee buy-sell swap auction for three years, held earlier in the day, dealers said. While most market participants said the swap auction likely gathered strong demand from corporates and banks, some said the demand may not have been as much as expected earlier. 

"There is a lot of dollar liquidity in the market so the auction should be fully subscribed easily," a dealer at a state-owned bank said. "But the small size of the swap may have led to some corporates not participating." According to an Informist poll of 10 market participants, the RBI may set a cut-off premium of 780 paise at the swap auction. 

Further, some banks bought dollars for near-term forward delivery on behalf of importers, noting the sharp depreciation in the rupee, which supported the premiums, dealers said. The rupee fell past the psychologically-crucial 91-per-dollar mark for the first time and hit a record low of 91.0775 a dollar on Tuesday. 

At 1345 IST, the one-year exact period dollar-rupee forward premium was 2.66%, unchanged from Monday's close. On an absolute basis, the premium was 241.24 paise, against Monday's close of 241.15 paise. (Pratiksha)

India Rupee: Falls past 91/$1 on dlr buys for FPIs, NDF expiry; RBI absent

NEW DELHI – The rupee slipped past the psychologically-crucial 91-per-dollar mark on Tuesday as banks persistently bought dollars for foreign portfolio investors and maturity of positions in the non-deliverable forwards market, dealers said. The rupee hit a record low of 91.0775 a dollar, falling past the figure of 91.00 a dollar just eight trading days after breaching 90.00.  

"This kind of movement (in the rupee) was very much expected by the market. RBI was allowing rupee to fall everyday ever since 90.00 happened," a dealer at a state-owned bank said. 

The Indian unit was also weighed down by strong dollar demand on behalf of oil marketing companies and other importers, who fear further weakness in the Indian currency, dealers said. Continuous outflows and dollar purchases by importers led to stop-losses being triggered on short dollar bets around 90.90, dragging the rupee further down, they said. 

Moreover, the Reserve Bank of India was missing in action and did not intervene through dollar sales to limit losses in the Indian unit, which further exacerbated the fall in the rupee, dealers said. For the rest of the day, the rupee is seen moving between 90.90 and 91.30 against the greenback. Dealers peg immediate technical support for the rupee at 91.10 a dollar. (Pratiksha) 

India Rupee: Technical levels for rupee - Dec 16

NEW DELHI – At 1110 IST, the rupee was at 90.8900 per dollar. At 0900 IST, the rupee was at 90.7900 a dollar, against the previous close of 90.7300 a dollar. Following are the key support and resistance levels for the rupee as provided by leading banks and brokerages:

(Pratiksha)

India Rupee: At record low as US trade deal uncertainty looms, FPIs buy dlrs

NEW DELHI – The rupee fell to a record low of 90.8200 against the dollar, continuing its weakening momentum from Monday, as risk appetite remained dampened owing to the prolonged delay in the India-US trade deal, dealers said. Banks' dollar purchases for foreign portfolio investors also weighed on the Indian unit, they said.   

On Monday, Commerce Secretary Rajesh Agrawal said that the government was "very close" to securing a "framework" deal with the US that would help lower Washington's 50% tariff on goods exports from India. However, Agrawal said he could not give a specific timeline for the deal to be signed.

"The rupee's weakness is being driven primarily by tariff-related concerns and FII selling, not by deterioration in economic fundamentals," Amit Pabari, managing director at CR Forex, said in a note. " As long as these short-term imbalances persist, pressure may continue."

Meanwhile, some dealers speculated that the Reserve Bank of India likely sold dollars to prevent further losses in the local unit, albeit not agressively. For the rest of the day, the rupee is seen moving between 90.50 and 91.00 against the greenback. Dealers peg strong technical support for the rupee at 91.00 a dollar. (Pratiksha) 

India Rupee: Expected range for rupee - Dec 16

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:

(Pratiksha)

India Rupee - Asia FX: Mixed ahead of US jobs data; South Korean won falls

NEW DELHI – Asian currencies moved on a mixed note against the dollar as market participants await the release of a slew of economic data, including the delayed November US jobs report later in the day, for more cues on the US Federal Reserve's rate trajectory.

The Bureau of Labor Statistics will release its long-awaited combined employment reports for October and November, following delays to data collection during the longest US government shutdown in history. Markets are currently pricing in a 78% chance of a rate cut in January, according to the CME FedWatch Tool.

The dollar index weakened to a near two-month low ahead of the release of the key US jobs report, which supported the Asian units. At 0820 IST, the dollar index, which measures the strength in the dollar against a basket of six major currencies, was at 98.30, up from 98.25 Monday and 98.39 Friday. However, a fall in domestic equities weighed on the currencies. 

The South Korean won fell 0.1% against the greenback even after South Korea's central bank and the national pension fund Monday agreed to extend their foreign exchange swap line to the end of 2026, a move aimed at stabilising the dollar-won market as the won hovers near the weakest level in 16 years. The Thai baht and Indonesian rupiah fell 0.1%. 

The Taiwan dollar fell 0.3% against the US unit after President Lai Ching-te Tuesday said Taiwan's global credibility was on the line and parliament should withdraw a series of laws the government opposes. His comments came amid a deepening dispute with the opposition, which has slammed him for ignoring the will of the people. The president Monday said he would not enact local government spending plans passed by the opposition-controlled parliament, saying they were fiscally unsound and that lawmakers were welcome to try and remove him in a no-confidence vote.

Meanwhile, the Phillipine peso and the Malaysian ringgit rose 0.2% against the greenback and the Chinese yuan rose 0.1%. (Pratiksha) End

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

Edited by Ashish Shirke

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