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Informist, Friday, Jan. 2, 2026

 

By Pratiksha

 

NEW DELHI – The rupee ended at an over two-week low against the dollar on Friday as banks persistently bought dollars on behalf of oil marketing companies and other importers, dealers said. This was despite the Reserve Bank of India's likely dollar sales to support the Indian unit earlier in the day, they said.  

 

"Everyone was buying (dollars) today, especially after the figure (90.00) broke," a dealer at a state-owned bank said. "There were some stop-losses (on short dollar bets) hit as well."

 

The Indian unit settled at 90.1975 a dollar, around 0.3% lower from its previous close of 89.9625 on Thursday. The rupee settled below the 90-per-dollar mark for the first time since Dec. 18. The RBI's heavy-handed intervention on Dec. 19 had led to the rupee appreciating over 1%, pushing it above the key level. 

 

The Indian currency started the day broadly steady against the greenback amid dull volume due to New Year holidays, dealers said. However, the local unit came under downward pressure shortly afterwards as banks stepped in to buy dollars on behalf of oil marketing companies and other importers, who fear depreciation in the Indian unit, dealers said. The Indian currency posted a fall of almost 5% against the dollar in 2025, its biggest yearly fall in three years.  

 

Meanwhile, some state-owned banks stepped in to sell dollars, likely on behalf of the RBI, who wanted to prevent the domestic unit from falling past the key 90-per-dollar mark, dealers said. The central bank had been protecting the key level for the last few trading days, they said. 

 

However, as importers stepped up their dollar purchases, the key 90-per-dollar level was broken. Dealers said stop-losses were triggered on short dollar bets at 90.00 a dollar, leading to the Indian unit to hit an intraday low of 90.2550 a dollar.  

 

"Initially, we were seeing support around 90.00 (a dollar)," a dealer at a private-sector bank said. "But once they (RBI) let go of the level, most short (dollar) positions were cut." Dealers said the central bank was broadly missing in action and did not intervene to support the Indian unit once it fell past 90.00. 

 

The Indian currency was also weighed down by a rise in the dollar index during European trade, they said. The dollar index rose due to a fall in the euro and the yen. At 1530 IST, the dollar index, which measures the dollar's strength against a basket of six major currencies, was at 98.45, against 98.28 Wednesday and 98.22 Tuesday.

 

A rise in domestic equities, however, limited the losses for the local currency, some dealers said. On Friday, both the Sensex and Nifty 50 ended 0.7% higher each.

 

	AT 1530 IST	AT 0900 IST	HIGH	LOW	PREVIOUS(AT 1530 IST)
Spot rupee per $1	90.1975	89.9300	89.9100	90.2550	89.9625
1-year dlr/rupee fwd (paise)	227.68	218.58	228.27	218.58	220.98

 

FORWARDS

The one-year dollar-rupee forward premium ended higher Friday as banks bought dollars for forward delivery on behalf of importers, noting the sharp fall in the rupee, dealers said. Importers bought forward dollars fearing further depreciation in the Indian unit and noting the relatively lower forward levels, they said. 

 

"The premiums have fallen quite a bit and that should allow more hedging by importers," Anil Kumar Bhansali, head of treasury and executive director at Finrex Treasury Advisors LLP, said. "Exporters need to continue selling on cash-spot basis and do minimum of hedging." The one-year forward premium had hit an over three-year high of 3.26% on Dec. 23 due to excess dollar liquidity. Since then, forward premium has cooled off almost 75 basis points.  

 

At 1530 IST, the one-year exact period dollar-rupee forward premium was 2.52%, up from Thursday's close of 2.46%. On an absolute basis, the premium was 227.68 paise, against Thursday's close of 220.98 paise.

 

OUTLOOK

On Monday, the rupee may take cues from the movement in the dollar index after the release of US Purchasing Managers' Index data, due later in the day, dealers said. Volume in the currency market may increase as market participants return after the New Year holidays.

 

Market participants will also closely monitor developments relating to the India-US trade deal. They expect sustainable relief for the rupee only once the deal comes through.

 

Traders will also watch out for the RBI's intervention to support the local currency. Importers may continue to buy dollars, fearing further depreciation in the local unit, they said. "The rupee is expected to be in the range of 89.80 to 90.50 on Monday with risk on the upside off dollar," Bhansali said. "Flow in equities is required to take the rupee up, which is lacking at the present moment in the absence of the US-India trade deal."

 

The rupee is likely to move in a range of 90.00-90.50 against the dollar. Immediate technical support for the rupee is pegged at 90.30.

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India Rupee - World FX: Euro falls on weak manufacturing data; dlr recovers

 

	AT 1526 IST	HIGH	LOW	PREVIOUS
GBP/USD	1.3455	1.3491	1.3449	1.3455
EUR/USD	1.1721	1.1766	1.1721	1.1747
NZD/USD	0.5769	0.5772	0.5752	0.5756
AUD/USD	0.6699	0.6707	0.6669	0.6662
USD/JPY	156.9050	156.9960	156.5240	156.7400
USD/CAD	1.3721	1.3727	1.3701	1.3699
EUR/JPY	183.9070	184.4365	183.8950	184.1300
CHF/USD	1.2602	1.2646	1.2593	1.2611
EUR/CHF	0.9300	0.9320	0.9298	0.9313

 

MUMBAI – The euro was down 0.2% against the dollar Friday due to weaker than expected data from the region. Unsatisfactory manufacturing activity data in the Eurozone and several of its key economies weighed on the currency. The Eurozone HCOB Manufacturing PMI was adjusted downwards to 48.8 from the initial estimate of 49.2 in December, indicating a more rapid decline from the 49.6 observed in November and 50.0 in October.

 

The Japanese yen was down 0.1% against the dollar. The cautious tone of Bank of Japan's monetary tightening weighed on the yen. 

In December, Bank of Japan increased its main interest rate to 0.75% from 0.50%, the second increase of the year to address inflation. Nevertheless, the measured approach to tightening and the absence of a definitive schedule for upcoming increases have weighed on the yen. 

 

The dollar index recovered due to a fall in the euro and the yen. The dollar concluded 2025 with its poorest performance since 2017 as a result of Federal Reserve instability, trade disruptions, and economic uncertainties. The dollar ended the year about 8% lower against a collection of major currencies, representing the most significant annual decline for the US currency in eight years. 

 

The dollar index, which measures the dollar's strength against a basket of six major currencies, was at 98.19 at 0942 IST Friday, against 98.28 Wednesday and 98.22 Tuesday. The index had hit a high of 98.50 on Wednesday.

 

Later on Friday, attention will turn to the US S&P Global Manufacturing PMI, which had a preliminary reading indicating a decline to 51.8 in December from 52.2 in November. The numbers align with moderate expansion of business activity.

 

Investors are expected to closely monitor the upcoming release of the US non-farm payrolls report, scheduled for the end of next week, along with an announcement on who will succeed Chairman Jerome Powell at the Federal Reserve, anticipated to be revealed in the next few weeks. (Kabir Sharma)

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India Rupee: Premium steady as volume dull due to new year holiday

 

	AT 1355 IST	AT 0900 IST	HIGH	LOW	PREVIOUS(AT 1530 IST)
Spot rupee per $1	90.2100	89.9300	89.9100	90.2250	89.9625
1-year dlr/rupee fwd (paise)	221.58	218.58	222.08	218.58	220.98

 

MUMBAI – The one-year dollar-rupee forward premium was steady on Friday due to muted activity on the back of new year holiday in most major markets, dealers said. Dealers said some importers bought dollars for forward delivery given the sharp fall in spot rupee, which supported the premiums. 

 

"There was absolutely nothing in the market until spot started moving," a dealer with a brokerage firm said. "Still won't see much effect in forwards until Monday," he said. 

 

US market was shut on Thursday so there were no cues from US Treasury yields, dealers said. The expectations of the interest rate differential with the US remaining narrow for longer weighed on the premiums after minutes of the Federal Open Market Committee's December meeting hinted at just one rate cut in 2026.

 

At 1353 IST, the one-year exact period dollar-rupee forward premium was 2.46%, unchanged from Thursday's close. On an absolute basis, the premium was 222.08 paise, against Thursday's close of 220.98 paise. (Kabir Sharma)

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India Rupee: Below 90/$ despite RBI dlr sales on panic dlr buying by oil cos

 

	AT 1155 IST	AT 0900 IST	HIGH	LOW	PREVIOUS(AT 1530 IST)
Spot rupee per $1	90.1275	89.9300	89.9100	90.1500	89.9625
1-year dlr/rupee fwd (paise)	220.58	218.58	220.58	218.58	220.98

 

MUMBAI – The rupee fell below the psychologically crucial level of 90 a dollar on Friday as banks persistently bought the greenback on behalf of oil marketing companies, dealers said. The Indian unit fell despite Reserve Bank of India's dollar sales around 89.99/$, they said. 

 

This was the first time the rupee tumbled below 90 a dollar since Dec. 19, when the RBI's aggressive intervention had pulled it above the crucial level. 

 

"Panic buying by oilers is taking the market up. Geopolitics, particularly Venezuela and the drone attacks in Russia and Ukraine yesterday (Thursday)," a dealer at a state-owned bank said. 

 

Oil prices rose on the opening day of trade in 2026, with Ukrainian drones hitting Russian oil installations and a US blockade impacting Venezuela's exports. On New Year's Day, Russia and Ukraine exchanged accusations of targeting civilians, despite negotiations supervised by US President Donald Trump intended to conclude the almost four-year conflict.

 

Moreover, in the recent move by Trump's administration to intensify pressure on Venezuelan President Nicolas Maduro, Washington imposed sanctions on four companies and their related oil tankers that it claimed were active in Venezuela's oil industry.

 

Some dealers said stop-losses on short dollar bets were triggered around 90/$, which also weighed on the Indian currency. However, A rise in domestic equity indices supported the Indian currency, dealers said. At 1131 IST, both the Nifty 50 and the Sensex were up 0.5?ch. 

 

For the rest of the day, the rupee is seen moving between 89.80 and 90.30 against the greenback. Dealers peg immediate technical support for the rupee at 90.20 a dollar.  (Kabir Sharma)

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India Rupee: Steady on low volume due to new year holidays; weak dlr aids

 

	AT 0944 IST	AT 0900 IST	HIGH	LOW	PREVIOUS(AT 1530 IST)
Spot rupee per $1	89.9725	89.9300	89.9100	89.9850	89.9625
1-year dlr/rupee fwd (paise)	218.58	218.58	219.58	218.58	220.98

 

MUMBAI – The rupee was steady against the dollar on Friday amid very low volume due to new year holidays, dealers said. "We are still in a festive mood, expect very low volumes," a dealer at a private bank said. 

 

A weak dollar index supported the Indian unit, dealers said. The dollar concluded 2025 with its poorest performance since 2017 as a result of Federal Reserve instability, trade disruptions, and economic uncertainties. The dollar ended the year about 8% lower against a collection of major currencies, representing the most significant annual decline for the US currency in eight years.

 

Market participants expect the Reserve Bank of India to step in through dollar sales to prevent the Indian currency from falling past 90.00 a dollar, as has been the case in recent times. However, some expect that the RBI may allow a move past the key level. 

 

The dollar index, which measures the dollar's strength against a basket of six major currencies, was at 98.19 at 0942 IST Friday, against 98.28 Wednesday and 98.22 Tuesday. The index had hit a high of 98.50 on Wednesday. 

 

For the rest of the day, the rupee is seen moving between 89.80 and 90.10 against the greenback. Dealers peg immediate technical support for the rupee at 90.00 a dollar.  (Kabir Sharma)

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India Rupee: Expected range for rupee - Jan 2

 

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

 

PARTICIPANT	SUPPORT	RESISTANCE
State-owned bank	90.20	89.70
Private-sector bank	90.10	89.75
Brokerage firm	90.00	89.50
Brokerage firm	90.10	89.60

 

 

 

 

 

 

(Kabir Sharma)

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India Rupee - Asia FX: Mixed; Australian dollar rises on bets of rate hike

 

MUMBAI – Asian currencies were mixed against the dollar in holiday-thinned trading as major markets such as Japan and China remained shut on Friday. 

 

The Taiwan dollar was down 0.3% against the dollar. In 2025, the Taiwan dollar recorded its most significant yearly increase in five years, climbing 4.27% against the US dollar due to substantial fluctuations resulting from global policy issues and unstable capital movements
 

The Thai baht, which rose 10% against the dollar in 2025, was up 0.2% in early trade. Thailand's finance ministry and Bank of Thailand have clearly recognised the strength of the baht as an issue that needs resolution. To deter inflows, the central this week mandated banks to report any foreign currency dealings exceeding $200,000. The ministry is considering a new tax on transactions involving online gold. 
 

The Australian dollar was up 0.4% against the greenback in early trade amid growing expectations of interest rate hikes by the Reserve Bank of Australia. Governor Michele Bullock said earlier that although the board did not explicitly consider a rate hike, it discussed the conditions under which interest rates might need to increase in 2026.

 

End

 

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

 

Edited by Tanima Banerjee

 

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