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Informist, Monday, Dec. 1, 2025

 

By Kabir Sharma

 

MUMBAI – The rupee ended at a record closing low against the dollar Monday as banks constantly bought dollars on behalf of importers and foreign portfolio investors, dealers said. The rupee kept falling to new record lows during the day. However, as the rupee approached the 89.80 a 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, they said.

 

"FII (foreign institutional investor) outflows led the rally against rupee, market panicked and importers also started buying as soon as it (dollar-rupee) touched 50 (89.50)," a dealer at a state-owned bank said. The rupee fell to a record low of 89.7825 a dollar before recovering some losses and ending the day at a record closing low level of 89.5475 a dollar against Friday's close of 89.4575 a dollar. 

 

In the first couple of hours of trade, the rupee was largely steady against the dollar as the positive impact of a higher than expected India GDP growth and weakness in the dollar index was offset by dollar purchases by some importers, dealers said. The rupee fell sharply within a span of five minutes as stop losses on short dollar bets around 89.50 a dollar were triggered. 

 

The rupee fell mainly because foreign portfolio investors sold Indian equities, but this caused panic among importers leading to further depreciation of the Indian unit, dealers said. "The stop losses led to panic amongst investors and importers," a dealer at a private bank said. "There was no stopping the rupee (from falling) before PSU banks stepped in," he said.

 

Dealers said that importers also bought dollars due to growing uncertainty surrounding the progress of the India-US trade agreement. This was despite remarks by Commerce Secretary Rajesh Agrawal on Friday that India and the US are expected to reach consensus on a trade deal framework within this calendar year to tackle the reciprocal tariffs that Washington imposed on Indian exports. Maturity of large positions in the non-deliverable forwards market also weighed on the Indian currency, according to dealers. 

 

"Indian rupee depreciated to a new record low as muted trade flows and limited progress on the US–India trade discussions weighed on sentiment," Siddhartha Khemka, head of research, wealth management, Motilal Oswal Financial Services Ltd., said in a note.

 

As the Indian unit inched closer to 89.80 a dollar level, some public sector banks sold dollars on behalf of the RBI and prevented further fall in the rupee. The apex bank sold dollars at multiple levels, which then took the rupee back above 89.55 a dollar.

 

A slight fall in the dollar index also supported the Indian unit, dealers said. Weak labour market data from the US led to increased expectations that the US Federal Reserve will cut rates in December. Fed fund futures traders are currently pricing in an 87.6% chance of a 25-basis-point cut by the Fed next week, as per the CME FedWatch tool. At 1642 IST, the dollar index, which measures the strength of the dollar against a basket of six major currencies, was 99.26, lower than 99.48 Friday and 99.53 Thursday.

  

	AT 1640 IST	AT 0900 IST	HIGH	LOW	PREVIOUS(AT 1530 IST)
Spot rupee per $1	89.5475	89.4400	89.4175	89.7825	89.4575
1-year dlr/rupee fwd (paise)	202.77	199.29	202.77	199.19	197.63

 

FORWARDS

The one-year dollar-rupee forward premium rose sharply on Monday, tracking a rise in the benchmark 10-year Indian government bond yield after expectations of a rate cut by the RBI at its policy meeting this month ebbed, dealers said. Premiums also rose as the rupee hit a record low in the spot market, forcing importers to rush to forwards to cover future bets, dealers said.

 

The yield on the 10-year government bond rose to 6.54% Monday from 6.51% Friday due to fading bets of a rate cut this week after India's GDP growth of 8.2% for Jul-Sept was 100 basis points higher than an Informist poll estimate. In the poll conducted before the GDP data was released, all but three of the 20 economists polled said they expected the MPC to lower the repo rate at the end of the three-day meeting on Dec. 5.

 

At 1530 IST, the one-year exact period dollar/rupee forward premium was 2.26%, up from 2.21% Friday. On an absolute basis, the premium was 202.76 paise, against Friday's close of 197.63 paise.

 

OUTLOOK

On Tuesday, dealers will closely monitor Indian equities and the flows from foreign investors. The rupee will also take cues from movement of the dollar index and other Asian currencies. 

 

Market participants will also keep an eye on the India-US trade deal talks, dealers said. "Trade deal uncertainty with the US continues to keep sentiment fragile. Although officials indicate discussions are moving positively, markets now need a final, concrete agreement for the rupee to find meaningful support," LKP Securities said in a note.

 

Dealers expect importers to continue buying dollars at every dip in the dollar-rupee rate, which would keep the downward pressure on the local currency intact. The rupee is expected to move in a range of 89.50 to 89.80 against the dollar. Immediate technical resistance for the rupee is pegged at 89.50 per dollar and support at 89.80.

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India Rupee - World FX: Yen up, official asks BoJ to act against inflation

 

	AT 1443 IST	HIGH	LOW	PREVIOUS
GBP/USD	1.3222	1.3250	1.3205	1.3242
EUR/USD	1.1617	1.1622	1.1590	1.1597
NZD/USD	0.5736	0.5744	0.5725	0.5731
AUD/USD	0.6548	0.6557	0.6538	0.6531
USD/JPY	155.4690	156.1960	155.2650	156.1500
USD/CAD	1.3991	1.3991	1.3965	1.3982
EUR/JPY	180.6180	181.1550	180.1980	181.0799
CHF/USD	1.2457	1.2469	1.2425	1.2442
EUR/CHF	0.9326	0.9335	0.9320	0.9324

 

MUMBAI – The Japanese yen was up 0.6% against the dollar after comments from government officials targeted at the Bank of Japan. Japan's Chief Cabinet Secretary Minoru Kihara said Monday that the administration expects the Bank of Japan to conduct appropriate monetary policy operations to bring inflation sustainably to the desired target.

 

The dollar index, which measures the strength in the greenback against six major currencies, was slightly lower on Monday ahead of the release of November's US ISM Purchasing Managers' Index, which is expected to have eased to 48.6 from 48.7 in October, according to a poll by FXStreet. The index, an employment gauge, is likely to be observed with particular interest. At 1442 IST, the dollar index was at 99.35, lower from 99.48 Friday and 99.53 Thursday.

 

The New Zealand dollar was down 0.2% against the dollar on weak data from China. Chinese factory activity, as measured by the RantingDog Manufacturing Purchasing Managers' Index, fell to contraction levels of 49.9 in November from October's 50.6 level. China is New Zealand's major trading partner and weak data from the Asian country tends to add negative pressure on the Kiwi currency.

 

In a data packed week, the Eurozone harmonised index of consumer prices is scheduled to release on Tuesday, services PMIs from Eurozone and the US on Wednesday, together with the ADP employment report, and the US personal consumption expenditures prices index on Friday. (Kabir Sharma)

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India Rupee: Premium up on importers' dlr buys, rise in 10-yr gilt yield

 

	AT 1348 IST	AT 0900 IST	HIGH	LOW	PREVIOUS(AT 1530 IST)
Spot rupee per $1	89.6400	89.4400	89.4175	89.7825	89.4575
1-year dlr/rupee fwd (paise)	201.69	199.29	201.79	199.19	197.63

 

MUMBAI – The one-year dollar-rupee forward premium rose, tracking a rise in the benchmark 10-year Indian government bond yield after expectations of a rate cut by the RBI at its December policy meeting ebbed, dealers said. Premiums also rose as the rupee hit a record low in the spot market, forcing importers to rush to forwards to cover future bets, dealers said. 

 

"Market is confused about the MPC (monetary policy committee) after the GDP data," a dealer at a private bank said. "The rise in G-sec is also pushing premiums," he said. The yield on the 10-year government bond rose to 6.54% Monday from 6.51% Friday due to fading bets of a rate cut this week after India's GDP growth of 8.2% for Jul-Sept was 100 basis points higher than an Informist poll estimate.

 

In an Informist poll conducted before the GDP data was released, all but three of the 20 economists polled said they expected the MPC to lower the repo rate at the end of the three-day meeting on Dec. 5. 

 

In the spot market, the rupee slumped to a record low of 89.7825 a dollar as banks persistently bought dollars on behalf of importers and foreign portfolio investors, leading to stop-losses being triggered on short dollar bets atround 89.50 a dollar, dealers said.

 

At 1346 IST, the one-year exact period dollar/rupee forward premium was 2.25%, up from 2.21% Friday. On an absolute basis, the premium was 201.69 paise, against Friday's close of 197.63 paise.  (Kabir Sharma)

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India Rupee: Hits record low as importers buy dlrs; RBI lets go of support

 

	AT 1200 IST	AT 0900 IST	HIGH	LOW	PREVIOUS(AT 1530 IST)
Spot rupee per $1	89.7275	89.4400	89.4150	89.7825	89.4575

 

India Rupee: Hits record low as importers buy dlrs; RBI lets go of support

 

NEW DELHI – The rupee slumped to a record low of 89.7825 a dollar as banks persistently bought dollars on behalf of importers and foreign portfolio investors, leading to stop losses being triggered on short dollar bets, dealers said. Stop losses were triggered around the key support of 89.50 a dollar, a level the Reserve Bank of India was seen protecting earlier, they said. 

 

The RBI was missing in action and did not intervene to support the Indian currency, contrary to its previous actions, which also dragged the local currency, according to dealers. "RBI was not there around levels we had expected, and there was constant demand (for dollars) in the market, which is why these levels happened," a dealer at a private-sector bank said. 

 

Maturity of large positions in the non-deliverable forwards market also weighed on the Indian currency, according to dealers. Importers bought the greenback amid loooming uncertainty over a breakthrough in the India-US trade deal, dealers said. This was despite comments by Commerce Secretary Rajesh Agrawal Friday, saying India and the US are likely to agree on the framework for a trade deal within this calendar year to address the reciprocal tariffs imposed by Washington on Indian exports. 

 

For the rest of the day, the rupee is seen moving between 89.40 and 89.80 against the greenback. Dealers peg immediate technical support for the rupee at 89.80 a dollar. (Pratiksha)

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India Rupee: Technical levels for rupee - Dec 1

 

NEW DELHI – At 1110 IST, the rupee was at 89.4675 per dollar. At 0900 IST, the rupee was at 89.4400 a dollar, against the previous close of 89.4575 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	89.80	89.50	89.20	89.00
Brokerage firm	89.60	89.50	89.00	88.80
Brokerage firm	89.60	89.55	89.20	89.00

 

(Pratiksha)

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India Rupee:Steady as importers' dollar buys offset weakness in dollar index

 

	AT 0935 IST	AT 0900 IST	HIGH	LOW	PREVIOUS(AT 1530 IST)
Spot rupee per $1	89.4350	89.4400	89.4275	89.4625	89.4575

 

NEW DELHI – The rupee was largely steady against the dollar Monday as banks bought dollars on behalf of importers, which offset the impact of weakness in the dollar index and a surprisingly higher than expected India GDP growth print for the September quarter, dealers said. 

 

"We were expecting a lower opening (for dollar-rupee), but seems like there is good demand (for dollars) in the market," a dealer at a private sector bank said. "But I feel 89.50 will be protected." Importers bought the greeback, fearing depreciation in the rupee, as it hovered close to its record low, dealers said. The rupee hit a record low of 89.4950 on Nov. 21. 

 

The dollar index remained weak, extending losses from last week, as weakening labour market data led to increased expectations that the US Federal Reserve will cut rates in December. Fed fund futures traders are currently pricing in an 87.5% chance of a 25-basis-point cut by the Fed next week, as per the CME FedWatch tool. At 0935 IST, the dollar index, which measures the strength of the dollar against a basket of six major currencies, was at 99.37, lower than 99.48 Friday and 99.53 Thursday. 

 

Meanwhile, India's economy expanded more than expected, with GDP growth rising to a six-quarter high of 8.2% in the September quarter, data released post market hours Friday showed. GDP growth in the quarter was 120 basis points higher than the Reserve Bank of India's forecast of 7.0% and one percentage point higher than the 7.2% projected by economists in an Informist poll.

 

Dealers expect the RBI to step in through dollar sales around current dollar-rupee levels to prevent the rupee from hitting a record low, dealers said. The Indian unit was hovering near its record low Friday as well, but the RBI's likely active intervention through dollar sales prevented a breach of the level, they said.

 

For the rest of the day, the rupee is seen moving between 89.30 and 89.50 against the greenback. Dealers peg immediate technical support for the rupee at 89.50 a dollar. (Pratiksha)

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India Rupee - Asia FX:Mixed as mkts await econ data before US FOMC decision

 

NEW DELHI – Asian currencies moved on a mixed note against the dollar Monday as market participants awaited a slew of economic data ahead of the US Federal Open Market Committee's interest rate decision next week. The key US personal consumption expenditures index will be released this week, which will offer insight ahead of the Fed's interest rate decision in its December meeting. The US November manufacturing purchasing managers' index is due later in the day while the November Services PMI is due Wednesday. Traders are currently pricing in an 87.5% chance of a 25-basis-point cut by the Fed next week, as per the CME FedWatch tool.

 

The dollar index remained weak, extending losses from last week, as weakening labour data led to increased bets that the US Fed will cut rates in December, which supported the Asian unit. At 0908 IST, the dollar index, which measures the strength of the dollar against a basket of six major currencies, was at 99.44, lower than 99.48 Friday and 99.53 Thursday. 

 

The Chinese yuan was flat against the dollar even after data released Sunday showed China's official manufacturing PMI inched up to 49.2 in November from 49.0 in October, but it remained in contraction territory. China's non-manufacturing activity shrank in November for the first time since December 2022. The non-manufacturing PMI, which includes services and construction, fell to 49.5 from 50.1 in October. Investors now await China's November manufacturing purchasing managers' index from

RatingDog, a private survey of mainly export-focused firms.

 

The South Korean won fell 0.2% against the greenback after data released Monday showed South Korea's factory activity contracted for a second straight month in November. PMI for manufacturers was at 49.4 in November, unchanged from October and below the 50-mark separating expansion from contraction. The Taiwan dollar also fell 0.2%. 

 

The Philippines peso rose 0.1% against the US unit even after data released Monday showed manufacturing activity fell to its lowest level in more than four years in November. Philippines' PMI slipped to 47.4 from 50.1 in October. Meanwhile, risk appetite remained dampened as thousands of demonstrators protested in the Philippines on Sunday, calling for the prosecution of top legislators and officials implicated in a multi-billion corruption scandal that has hit the country. 

 

The Indonesian rupiah rose 0.1%, while the Malayasian ringgit and Thai baht fell 0.1?ch. (Pratiksha) 

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India Rupee: Expected range for rupee - Dec 1

 

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

 

PARTICIPANT	SUPPORT	RESISTANCE
State-owned bank	89.50	89.25
Private-sector bank	89.50	89.20
Foreign bank	89.52	89.10
Brokerage firm	89.48	89.28
Brokerage firm	89.60	89.00

 

 

 

 

 

 

 

 

(Pratiksha)

 

End

 

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

 

Edited by Ashish Shirke

 

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