India Rupee Review
Flat as exporters' dlr sales offset MPC rate cut impact
This story was originally published at 17:11 IST on 5 December 2025
Register to read our real-time news.Informist, Friday, Dec. 5, 2025
By Kabir Sharma
MUMBAI – The rupee ended flat against the dollar Friday as the impact of a rate cut by the Reserve Bank of India's Monetary Policy Committee, which led to panic buying of dollars, was offset by dollar sales by banks on behalf of exporters, dealers said. "Half of the market was not expecting a cut, so panic set in and importers started buying as soon as the cut was announced," a dealer at a private-sector bank said.
The rupee closed at 89.9800 a dollar, unchanged from 89.9750 a dollar Thursday. The currency moved in a range of 38 paise during the day, touching a high of 89.6900 a dollar.
The RBI's rate-setting panel lowered the policy repo rate by 25 basis points to 5.25% in a unanimous decision, the central bank's Governor Sanjay Malhotra said. The committee also retained the "neutral" policy stance, though external member Ram Singh was of the view that the stance should be changed to "accommodative".
The Indian currency started the day higher against the greenback as banks unwound long dollar bets ahead of the monetary policy outcome, which supported the rupee, dealers said. Some exporters also sold dollars early in the day's trading session, helping the rupee.
However, as soon as the governor announced a repo rate cut, the rupee started falling as banks bought dollars on behalf of importers, dealers said. The rupee fell below the 90/$1 level and touched the day's low of 90.0675 at which point exporters started selling dollars, keeping the rupee broadly between 89.90 a dollar and 90.07 a dollar for the rest of the day.
Some dealers speculated that the RBI also sold dollars around the day's low to prevent excessive depreciation in the local currency, dealers said. Indian equities reacted positively to the news of the rate cut, with the benchmark Nifty 50 and BSE Sensex ending 0.6% and 0.5% higher, respectively; this too supported the currency.
The rupee was also supported by broad-based weakness in the dollar index, dealers said. The dollar has been under pressure with investors expecting White House economic adviser Kevin Hassett to succeed Jerome Powell as Federal Reserve chair in May. US President Donald Trump said earlier in the week that he would reveal early next year his nominee to chair the Fed, prolonging a month-long selection process despite earlier asserting that he had made up his mind.
The dollar index also weakened as strong labour market data from the US cemented bets of a rate cut by the Fed next week. Initial claims for state unemployment benefits fell 27,000 to a seasonally adjusted 191,000 in the week ended Nov. 29, the lowest level since September 2022. Economists polled by Reuters had forecast 220,000 claims for the week.
At 1656 IST, the dollar index, which measures the strength of the dollar against a basket of six major currencies, was at 99.03, compared with 99.07 Thursday and 98.87 Wednesday.
| AT 1530 IST | AT 0900 IST | HIGH | LOW | PREVIOUS (AT 1530 IST) | |
| Spot rupee per $1 | 89.9800 | 89.8400 | 89.6900 | 90.0675 | 89.9750 |
| 1-year dlr/rupee fwd (paise) | 220.37 | 223.15 | 225.02 | 211.73 | 226.53 |
FORWARDS
Dollar-rupee premiums across tenures slumped Friday as the RBI announced a $5 billion dollar/rupee buy/sell swap for a period of three years, dealers said. As soon as the swap was announced, the one-year dollar-rupee forward premium slumped 14 bps to 2.38% from 2.52% Thursday. The auction will be conducted on Dec. 16, the RBI said in a release after the monetary policy decision.
"The MPC has in a platter given what the market expected. A rate cut alongside long dated swaps and OMOs (open market purchases of gilts) not only keeps the liquidity promise intact, but also will keep the currency in relative balance. The market appears to have reacted positively on all counts," Lakshmanan V., group president and head of treasury at Federal Bank Ltd., said.
Some banks bought dollars for forward delivery on behalf of importers, which limited a fall in the premium, dealers said. Importers bought forward dollars, fearing a further fall in the rupee going ahead, dealers said.
At 1530 IST, the one-year exact period dollar/rupee forward premium was 2.45%, up from 2.52% Thursday. On an absolute basis, the premium was 220.37 paise, against Thursday's close of 226.53 paise.
OUTLOOK
On Monday, dealers will closely monitor Indian equities and foreign investor flows. The rupee will also take cues from movement 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. The US had, in August, imposed 50% tariff on goods imported from India, half of which was a penalty for purchasing crude oil from Russia.
Market participants will also take cues from the delayed US personal consumption expenditures data for September, due 1900 IST Friday, while waiting for the outcome of the US Federal Open Market Committee's meeting Wedneday. Most currency dealers expect the FOMC to lower the Fed funds rate.
Monday, the rupee is expected to move in a range of 89.70 to 90.20 against the dollar. Immediate technical support for the rupee is pegged at 90.20 per dollar and support at 90.30.
India Rupee - World FX: Yen continues to rise vs dlr on BoJ rate hike bets
| AT 1341 IST | HIGH | LOW | PREVIOUS | |
| GBP/USD | 1.3349 | 1.3363 | 1.3320 | 1.3327 |
| EUR/USD | 1.1659 | 1.1673 | 1.1642 | 1.1643 |
| NZD/USD | 0.5774 | 0.5781 | 0.5759 | 0.5760 |
| AUD/USD | 0.6630 | 0.6630 | 0.6606 | 0.6609 |
| USD/JPY | 154.7720 | 155.2290 | 154.3460 | 155.1130 |
| USD/CAD | 1.3947 | 1.3963 | 1.3941 | 1.3956 |
| EUR/JPY | 180.4580 | 180.8900 | 180.0980 | 180.6200 |
| CHF/USD | 1.2451 | 1.2472 | 1.2438 | 1.2439 |
| EUR/CHF | 0.9364 | 0.9366 | 0.9352 | 0.9359 |
MUMBAI – The Japanese yen surged 0.5% against the dollar on Friday as comments from Bank of Japan Governor Kazuo Ueda earlier this week cemented bets of a rate hike by the central bank. Ueda said on Monday that the central bank would consider the pros and cons of raising the policy rate at the Dec. 18-19 meeting.
The euro was up 0.2% against the greenback on the expectations that the European central bank will not cut rates further. The expectations were reaffirmed by President Christine Lagarde saying that the central bank expects inflation to stay near its 2% goal in the coming months.
The dollar has been under pressure as investors anticipate the possibility of White House economic adviser Kevin Hassett succeeding Jerome Powell as the Federal Reserve chairman in May. US President Donald Trump said this week that he would reveal his choice to replace Powell early next year, prolonging a month-long selection process despite earlier asserting he had chosen a candidate.
The dollar index also weakened as strong labour market data from the US cemented bets of a rate cut by the Federal Reserve at its meeting next week. Initial claims for state unemployment benefits fell 27,000 to a seasonally adjusted 191,000 in the week ended Nov. 29, the lowest level since September 2022. Economists polled by Reuters had forecast 220,000 claims for the week.
At 1339 IST, the dollar index, which measures the strength of the dollar against a basket of six major currencies, was at 98.88, compared with 99.07 Thursday and 98.87 Wednesday. (Kabir Sharma)
India Rupee: Premiums slump as RBI announces $5 bln dlr/rupee buy/sell swap
| AT 1111 IST | AT 0900 IST | HIGH | LOW | PREVIOUS (AT 1530 IST) | |
| Spot rupee per $1 | 89.8825 | 89.8400 | 89.6900 | 90.0450 | 89.9750 |
| 1-year dlr/rupee fwd (paise) | 214.16 | 223.15 | 225.02 | 211.73 | 226.53 |
MUMBAI – Dollar-rupee premiums across tenures slumped on Friday as the Reserve Bank of India announced a $5 billion dollar/rupee buy/sell swap for a period of three years, dealers said. "All premiums have adjusted for the swap, but more effect will be visible on long term," a dealer at a state-owned bank said.
As soon as the swap was announced, the one-year dollar-rupee forward premium slumped 14 basis points to 2.38% from 2.52% on Thursday. The auction will be conducted on Dec. 16, the RBI said in a release after the monetary policy decision.
Some banks bought dollars for forward delivery on behalf of importers, which limited losses in the premium, dealers said. Importers bought forward dollars, fearing a further fall in the rupee going ahead, dealers said. In the spot market, the rupee slumped past the 90/$ mark as the RBI announced a cut in the repo rate.
The RBI's Monetary Policy Committee Friday lowered the policy repo rate by 25 basis points to 5.25% in a unanimous decision, the central bank's Governor Sanjay Malhotra said. The committee also retained the 'neutral' policy stance but external member Ram Singh was of the view that the stance be changed to 'accommodative'.
At 1115 IST, the one-year exact period dollar/rupee forward premium was 2.38%, down from 2.52% Thursday. On an absolute basis, the premium was 214.16 paise, against Thursday's close of 226.53 paise. (Kabir Sharma)
India Rupee: Slumps past 90/$ as RBI cuts repo rate by 25 bps
| AT 1058 IST | AT 0900 IST | HIGH | LOW | PREVIOUS (AT 1530 IST) | |
| Spot rupee per $1 | 89.9300 | 89.8400 | 89.6900 | 90.0450 | 89.9750 |
MUMBAI – The rupee slumped past 90 a dollar as the Reserve Bank of India cut the repo rate, dealers said. "A rate cut is negative for the currency. It was not fully expected, so there was some panic in the market," a dealer at a private bank said.
The RBI's Monetary Policy Committee Friday lowered the policy repo rate by 25 basis points to 5.25% in a unanimous decision, the central bank's Governor Sanjay Malhotra said. The committee also retained the 'neutral' policy stance but external member Ram Singh was of the view that the stance be changed to 'accommodative'.
A $5-billion dollar/rupee buy/sell swap was also announced by the governor while detailing the monetary policy outcome.
As soon as the Indian unit touched the 90-a-dollar level, some exporters sold dollars, which supported the rupee, dealers said. Indian equities reacted positively to the news of the rate cut, with benchmark indices Nifty 50 and Sensex rising 0.4%; this too supported the currency.
For the rest of the day, the rupee is seen moving between 89.70 and 90.20 against the greenback. Dealers peg immediate technical support for the rupee at 90.20 a dollar. (Kabir Sharma)
India Rupee: Rises on dlr sales by exporters, unwinding of long dlr bets
| AT 0922 IST | AT 0900 IST | HIGH | LOW | PREVIOUS (AT 1530 IST) | |
| Spot rupee per $1 | 89.7425 | 89.8400 | 89.7225 | 89.8500 | 89.9750 |
MUMBAI – The rupee was higher against the dollar Friday as banks sold dollars on behalf of exporters, dealers said. Some banks also sold dollars to unwind their long dollar bets ahead of the outcome of the Monetary Policy Committee's meeting, they said.
"Some position-based trading is happening, people are selling (dollars) now as they expect the rupee appreciate after the policy," a dealer at a state-owned bank said. "It is possible that they (RBI) announce some measure to boost the currency," he said.
Market participants now wait for a decision by the RBI's Monetary Policy Committee meeting at 1000 IST Friday. Dealers are divided on whether the RBI will cut interest rates at its last policy meeting of the year after the strong GDP growth for Jul-Sept and as inflation is well below the central bank's tolerance range of 2-6%.
The dollar remained near a five-week low against major currencies, which also supported the rupee, dealers said. The dollar index weakened as strong labour market data from the US cemented bets of a rate cut by the Federal Reserve at its meeting next week.
For the rest of the day, the rupee is seen moving between 89.70 and 90.20 against the greenback. Dealers peg immediate technical resistance for the rupee at 89.70 a dollar. (Kabir Sharma)
India Rupee - Asia FX: Mixed; Thai baht up despite efforts to curtail rise
MUMBAI – Asian currencies were mixed against the dollar on Friday as the greenback recovered slightly but remained near the five-week low it touched Thursday. At 0816 IST, the dollar index, which measures the strength in the dollar against a basket of six major currencies, was at 99.01, compared with 99.07 Thursday and 98.87 Wednesday.
The Thai baht was 0.2% higher against the dollar. The Bank of Thailand and Governor Vitai Ratanakorn reached out this week to the Ministry of Finance as it detailed a package of measures to curb the value of the baht, which is now one of Asia's strongest currencies and has appreciated by nearly 7% in the last four years against the US currency, local media reported.
The Bank of Thailand is expected to lower interest rates at its Monetary Policy Committee meeting in December. On Wednesday, it asked the finance minister to increase the maximum transaction limit on fund outflows from $1 million to $10 million.
The Taiwan dollar was down 0.1% against the dollar. Central Bank of China (Taiwan) Governor Yang Chin-long said central bank money will remain the "anchor" of the global monetary system, regardless of the development of stablecoins, tokenised deposits or other payments innovations.
The South Korean won rose 0.2% against the greenback. Finance Minister Koo Yun-cheol said Friday that strengthening the country's long-term economic competitiveness is the fundamental way to stabilise the volatile foreign exchange market as the Korean won continues to weaken against the dollar. (Kabir Sharma)
India Rupee: Expected range for rupee - Dec 5
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 | 90.20 | 89.75 |
| Private-sector bank | 90.10 | 89.70 |
| Brokerage firm | 90.04 | 89.59 |
(Kabir Sharma)
End
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Edited by Rajeev Pai
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.
To read more please subscribe
Share this Story:
