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Informist, Thursday, Dec. 18, 2025

 

By Pratiksha

 

NEW DELHI – The rupee ended higher for the second successive trading day against the dollar but erased a considerable portion of its gains as banks persistently bought dollars on behalf of oil marketing companies and other importers, dealers said. A rise in the dollar index also weighed on the Indian unit, they said. 

 

The domestic unit had surged earlier in the day as state-owned banks sold dollars, probably on behalf of the Reserve Bank of India, dealers said. Foreign fund inflows into some Indian corporations also boosted the Indian unit, they said.  

 

"Importers were not buying (dollars) much initially, but once the rupee settled around 90, substantial buying came in," a dealer at a state-owned bank said. "These are good levels for importers to book."

 

After touching a high of 90.0375 a dollar, the rupee settled at 90.2400, against 90.3800 Wednesday. The local currency moved in a range of 42 paise during the day.

 

The Indian currency started the day broadly steady against the dollar as market participants remained watchful of intervention by the central bank after the rupee posted its biggest one-day gain in nearly two months Wednesday on the back of the RBI's aggressive move. Market participants speculated that the central bank sold around $3 billion-$5 billion in the spot market Wednesday.

 

Dealers said the RBI likely stepped in to sell dollars shortly after spot opening, following which the rupee rose above 90.30 a dollar. "RBI has started hitting the market when it is mostly illiquid, which leads to sharp one-sided movements," a dealer at a private-sector bank explained.

 

Most dealers had expected the central bank to follow up on its actions Wednesday's to sustainably drive out speculative positions from the currency market. They pointed out that the RBI's unexpectedly heavy-handed intervention in the spot market had caught most banks, including private-sector and foreign banks, off gaurd, resulting in multiple stop-losses being triggered on long dollar bets.

 

"Just a day of strong intervention would not suffice for pushing out speculators from the market, which is why RBI may have tried keeping the momentum intact today," a dealer at another private-sector bank said. Noting the likely sustained intervention by the central bank, traders trimmed long dollar positions, which also boosted the rupee, dealers said. 

 

Further, some foreign banks sold dollars for foreign fund inflows into some corporations, which also helped the Indian currency rise a few notches, dealers said. However, banks rushed to buy dollars on behalf of importers to take advantage of the relatively lower dollar-rupee levels, which weighed on the rupee, they said. "Exporters may have missed the bus by not covering at 91.00, but importers should be booking profits at these levels and not make the same mistake," a dealer at a broking firm said.

 

Meanwhile, the dollar index edged higher ahead of policy decisions by the Bank of England and the European Central Bank later in the day, which also weighed on the rupee, dealers said. At 1530 IST, the dollar index, which measures the strength in the dollar against a basket of six major currencies, was at 98.53, up from 98.39 Wednesday and 98.21 Tuesday.

 

	AT 1530 IST	AT 0900 IST	HIGH	LOW	PREVIOUS (AT 1530 IST)
Spot rupee per $1	90.2400	90.3500	90.0375	90.4525	90.3800
1-year dlr/rupee fwd (paise)	251.34	238.24	251.34	238.24	239.36

 

FORWARDS

The one-year dollar-rupee forward premium ended at an over-three-year-high as banks bought dollars for forward delivery to grab the opportunity for arbitrage between onshore forward and offshore non-deliverable forward rates, dealers said. Forwards also gained as corporations deployed excess dollars through near-term foreign exchange swaps with the end of the year in sight, they said.

 

Federal Reserve Governor Christopher Waller said Wednesday that the US central bank still has room to cut interest rates amid rising job market weakness. Waller's comments led to expectations of more rate cuts by the Fed next year, boosting forward premiums, dealers said. Market participants now await US CPI data, due Thursday, for cues on the Fed's interest rate trajectory.

 

At 1530 IST, the one-year exact period dollar-rupee forward premium was 2.78%, up sharply from Wednesday's close of 2.63%. On an absolute basis, the premium was 251.34 paise, against Wednesday's close of 239.36 paise. 

 

OUTLOOK

On Friday, the rupee may take cues from movement in the dollar index after the release of the US CPI data, due later Thursday, dealers said. The US CPI is likely to have increased 3.1% year-on-year in November, which would be the largest gain since May 2024, a Reuters survey of economists estimated. The CPI rose 3.0% in the 12 months through September. The rupee may also take cues from the policy decisions of the BoE and ECB later in the day.

 

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 watch out for the RBI's intervention around 90.50 a dollar, and expect importers to step in to buy dollars in case the rupee appreciates further.

 

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

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India Rupee - World FX: Pound sterling falls ahead of BoE policy decision

 

	AT 1430 IST	HIGH	LOW	PREVIOUS
GBP/USD	1.3355	1.3381	1.3355	1.3375
EUR/USD	1.1730	1.1750	1.1728	1.1740
NZD/USD	0.5763	0.5782	0.5755	0.5770
AUD/USD	0.6608	0.6619	0.6593	0.6604
USD/JPY	155.8770	155.9540	155.4300	155.6970
USD/CAD	1.3775	1.3789	1.3769	1.3786
EUR/JPY	182.8420	183.1724	182.4400	182.8009
CHF/USD	1.2568	1.2584	1.2565	1.2565
EUR/CHF	0.9332	0.9344	0.9331	0.9340

 

NEW DELHI – The pound sterling fell 0.1% against the dollar ahead of the Bank of England's policy decision later in the day, where it is widely expected to lower borrowing costs for the fourth time this year. The central bank is likely to cut the Bank Rate to 3.75% from 4% due to a sharp slowdown in inflation, a looser labour market and weakening growth.

 

The euro was also down 0.1% ahead of the European Central Bank's policy decision later Thursday, where it is widely expected to hold rates steady and signal little appetite for cuts in the near term. The Japanese yen was also down 0.1%. The Bank of Japan Thursday starts a two-day meeting that is expected to result in a hike in policy rates to a three-decade high. Prime Minister Sanae Takaichi said on Wednesday that Japan must pursue proactive spending that will boost growth and tax revenues, reiterating her administration's focus on shoring up a fragile economy.

 

The dollar index edged higher ahead of the key central bank policy decisions. Market participants also

await US consumer price index data, due on Thursday, for further cues on the US Federal Reserve's interest rate trajectory. The CPI likely increased 3.1% year-on-year in November, which would be the largest gain since May 2024, a Reuters survey of economists estimated. The CPI rose 3.0% in the 12 months through September.

 

At 1430 IST, the dollar index, which measures the strength in the dollar against a basket of six major currencies, was at 98.47, up from 98.39 Wednesday and 98.21 Tuesday. The Australian dollar was flat against the dollar.  (Pratiksha)

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India Rupee: Premium at 11-month high on fwd buys for onshore-offshore arbitrage

 

	AT 1345 IST	AT 0900 IST	HIGH	LOW	PREVIOUS (AT 1530 IST)
Spot rupee per $1	90.1750	90.3500	90.0375	90.4525	90.3800
1-year dlr/rupee fwd (paise)	244.13	238.24	244.48	238.24	239.36

 

NEW DELHI – The one-year dollar-rupee forward premium jumped to an over 11 month high as banks bought dollars for forward delivery, to take advantage of the arbitrage opportunity between the onshore forwards and offshore non-deliverable forwards rates, dealers said. "We are seeing some arbitrage paying as offshore rates are lucrative," a dealer at a foreign bank said. "Comments from US were also supportive of more rate cuts (by the Federal Reserve)."

 

Federal Reserve Governor Christopher Waller said on Wednesday that the US central bank still had room to cut interest rates amid rising job market weakness. Waller's comments led to expectation of more rate cuts by the US Fed next year, boosting forward premiums, dealers said. Market participants now await US consumer price index data, due on Thursday, for further cues on the Fed's interest rate trajectory. 

 

Further, some banks bought dollars on behalf of importers, noting the recent appreciation in the rupee, which supported forward premiums, dealers said. However, hedging by importers was not aggressive in nature, they said. The rupee appreciated sharply to 90.0375, as state-owned banks sold dollars, likely on behalf of the Reserve Bank of India, dealers said. 

 

At 1345 IST, the one-year exact period dollar-rupee forward premium was 2.71%, against Wednesday's close of 2.63%. On an absolute basis, the premium was 244.13 paise, against Wednesday's close of 239.36 paise.  (Pratiksha)

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India Rupee: Surges as PSU banks continuously sell dollars, likely for RBI

 

	AT 1212 IST	AT 0900 IST	HIGH	LOW	PREVIOUS (AT 1530 IST)
Spot rupee per $1	90.0500	90.3500	90.0450	90.4525	90.3800

 

NEW DELHI – The rupee surged against the dollar, building on its positive momentum from Wednesday, as state-owned banks sold dollars, likely on behalf of the Reserve Bank of India, dealers said. The Indian currency rose to 90.0450 a dollar.

 

"It is a one sided-move for rupee today as well. Nats (Nationalised banks) are selling (dollars) continuously," a dealer at a private-sector bank said. "This kind of action (by the RBI) was expected today after yesterday's (Wednesday) move."

 

The Indian unit posted its biggest one-day gain in nearly two months on Wednesday owing to the RBI's heavy-handed intervention through dollar sales, dealers said. Market participants speculated that the central bank sold around $3 billion-$5 billion in the spot market Wednesday. Further, noting the sustained intervention by the central bank, traders trimmed their long dollar positions, which also boosted the Indian unit, dealers said. 

 

Meanwhile, some banks bought the greenback on behalf of importers, who wanted to make the most of the relatively lower dollar-rupee levels, which limited gains for the local unit, dealers said. "There is strong buying (of dollars) on dips (in dollar-rupee), but selling is more in comparison," a dealer at a state-owned bank said. 

 

For the rest of the day, the rupee is seen moving between 89.90 and 90.50 against the greenback. Dealers peg strong technical resistance for the rupee at 90.00 a dollar.  (Pratiksha)

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India Rupee: Technical levels for rupee - Dec 18

 

NEW DELHI – At 1125 IST, the rupee was at 90.1375 per dollar. At 0900 IST, the rupee was at 90.3500 a dollar, against the previous close of 90.3800 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
Private-sector bank	91.00	90.50	90.00	89.90
Brokerage firm	91.00	90.80	90.00	89.80
Brokerage firm	90.70	90.50	90.00	89.80

 

(Pratiksha)

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India Rupee: Falls slightly as importers buy dollars; RBI intervention eyed

 

	AT 0945 IST	AT 0900 IST	HIGH	LOW	PREVIOUS (AT 1530 IST)
Spot rupee per $1	90.4300	90.3500	90.3100	90.4525	90.3800

 

NEW DELHI – The rupee fell slightly against the dollar as some banks bought dollars on behalf of importers, noting the relatively lower dollar-rupee levels, dealers said. The Indian unit posted its biggest one-day gain in nearly two months on Wednesday owing to the RBI's heavy-handed intervention through dollar sales, dealers said. 

 

Market participants speculated that the central bank sold around $3 billion-$5 billion in the spot market Wednesday. The intervention came after the rupee fell to a lifetime low of 91.0775 a dollar on Tuesday. 

 

Market participants remain watchful of further intervention by the central bank in the currency market around current levels, dealers said. "The market is in wait and watch mode right now. We are trying to understand what level RBI is comfortable at now," a dealer at a state-owned bank said. "The overall direction for rupee is still on the downside, but we are expecting RBI to support 90.50 (a dollar)"

 

Meanwhile, some market participants expect more bouts of aggressive dollar sales intervention by the central bank, in order to completely stop speculative trades in the market. "With timely and visible intervention, the 90.00 level now stands out as an important support zone," Amit Pabari, managing director at CR Forex, said in a note. "However, a move back above 90.50 would reopen the path toward the 90.70–91.00 zone. For now, the RBI remains the dominant force guiding near-term direction."

 

For the rest of the day, the rupee is seen moving between 90.20 and 90.60 against the greenback. Dealers peg strong technical support for the rupee at 90.50 a dollar.  (Pratiksha)

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India Rupee: Expected range for rupee - Dec 18

 

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

 

PARTICIPANT	SUPPORT	RESISTANCE
State-owned bank	90.50	89.75
Private-sector bank	90.50	90.10
Foreign bank	90.75	90.10
Brokerage firm	90.55	89.85
Brokerage firm	90.50	89.90

 

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(Pratiksha)

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India Rupee - Asia FX: Mixed ahead of BoE, ECB policy decisions; yuan steady

 

NEW DELHI – Asian currencies moved on a mixed note against the dollar as market participants awaited policy decisions by multiple central banks, including the Bank of England and the European Central Bank on Thursday. The ECB is widely expected to keep its policy rates steady and signal little appetite for cuts, while the BoE is expected to lower interest rates after a sharp slowdown in inflation. Meanwhile, Bank of Japan is expected to hike interest rates on Friday to a three-decade high.

 

Market participants also await US consumer price index data, due on Thursday, for further cues on the US Federal Reserve's interest rate trajectory. Fed Governor Christopher Waller said on Wednesday that the US central bank still had room to cut interest rates amid rising job market weakness. At 0840 IST, the dollar index, which measures the strength in the dollar against a basket of six major currencies, was at 98.41, up from 98.39 Wednesday and 98.21 Tuesday.

 

The Chinese yuan was flat against the dollar even after data released Thursday showed China's jobless rate for 16-to-24-year-olds, excluding college students, stood at 16.9% in November, down from 17.3% the previous month. 

 

The South Korean won was down 0.2% against the US unit. South Korea's central bank said on Wednesday that headline inflation next year could exceed earlier forecasts if the won stays at its current level against the dollar, reports said.

 

The Indonesian rupiah fell 0.1% against greenback after the country's central bank held its policy rates unchanged for a third straight meeting on Wednesday. The central bank will maintain its focus on supporting the rupiah, it said. The Thai baht was also down 0.1?ter the central bank cut interest rate by 25 basis points on Wednesday, as expected. The central bank kept the door open to more easing if the economy fared worse than forecast and faced deflationary risks, it said. 

 

The Phillipine peso rose 0.1%, while the Malaysian ringgit and the Taiwan dollar were flat against the dollar. Taiwan's central bank is expected to leave interest rates unchanged for a seventh straight quarter at its meeting Thursday.  (Pratiksha)  End

 

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

 

Edited by Rajeev Pai

 

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