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Informist, Friday, Dec. 19, 2025

 

By Pratiksha

 

NEW DELHI – The rupee posted its biggest single-day gain against the dollar in over three years on Friday, as the Reserve Bank of India unexpectedly stepped in to sell dollars heavily in the last few minutes of trade, dealers said. The intervention was a repeat of the central bank's aggressive intervention on Wednesday. 

 

"I think the RBI continously sold for the last 5-7 minutes. There was nobody else and since the market was a bit illiquid by the end, they didn't have to sell a lot," a dealer at a state-owned bank said. 

 

Appreciating 1.1% against the dollar, the rupee settled at 89.2700 a dollar, its highest closing level since Nov. 25. On Thursday, it had settled at 90.2400. The Indian currency appreciated 1.3% against the dollar this week.  

 

While most dealers said it was difficult to ascertain the quantum of the central bank's last-minute intervention, some estimated that the RBI might have sold around $1.5 billion-$2 billion in the spot market through state-owned banks. With the RBI's sustained brute force, the Indian unit has bounced back almost 2% from its record low of 91.0775, hit on Tuesday. 

 

Some dealers said they had expected the central bank to repeat its Wednesday's action of heavily selling dollars, as it looks to sustainably drive away speculative positions from the currency market. The central bank had aggressively sold dollars, likely around $3 billion-$4 billion, in the spot market on Wednesday, leading to the Indian unit logging its biggest one-day gain in nearly two months.

 

"I was very much expecting such a move (in rupee), maybe not in such a large way," a dealer at a private sector bank said. "Just one bout of strong intervention would not have sufficed to push out speculators." 

 

The Indian currency began the day on a positive note, opening 11 paise higher against the greenback, as the RBI likely sold dollars in the offshore NDF market before the spot market opened, dealers said. 

 

However, gains for the Indian unit were short-lived as banks rushed to buy dollars on behalf of oil marketing companies and other importers, noting the relatively lower dollar-rupee levels. 

 

A rise in the dollar index, tracking losses in the Japanese yen, also weighed on the Indian unit and it touched a low of 90.2900 a dollar, dealers said. At 1530 IST, the dollar index, which measures the strength in the dollar against a basket of six major currencies, was at 98.66, up from 98.42 Thursday and 98.39 Wednesday.

 

However, during the last leg of trade, the central bank's strong intevention sharply boosted the Indian unit, and it rose to a high of 89.2400 a dollar, dealers said. A rise in domestic equities also supported the Indian unit, dealers said. On Friday, the Sensex and the Nifty 50 ended 0.5% and 0.6% higher, respectively. 

 

FORWARDS

The one-year dollar-rupee forward premium ended at an over three-year high as banks bought dollars for forward delivery, noting the surplus dollar liquidity in the system, dealers said. The central bank has been aggressively selling dollars in the spot market to support the rupee. However, the RBI has not been neutralising its spot interventions by selling dollars for forward delivery, leading to surplus dollar liquidity in the system, dealers said.

 

Premiums also gained owing to corporates deploying excess dollars through near-term foreign exchange swaps amid the year-end, dealers said. A fall in US Treasury yields also boosted forward premiums, they said. US Treasury yields ended lower Thursday after a softer-than-expected US inflation print heightened hope of more rate cuts by the US Federal Reserve. The 10-year US bond yield fell to 4.12% Thursday from 4.16% Wednesday. 

 

At 1530 IST, the one-year exact period dollar-rupee forward premium was 2.86%, against Thursday's close of 2.78%. On an absolute basis, the premium was 255.60 paise, against Thursday's close of 251.34 paise.

 

OUTLOOK

On Monday, the rupee may open steady against the dollar as market participants will be cautious of the RBI's intervention in the currency market. "We'll have to wait for the market to settle before taking any positions. RBI will remain the main player for now," a dealer at a foreign bank said. 

 

After the rupee's sharp appreciation, banks may buy dollars on behalf of importers, which may weigh on the Indian unit, dealers said. Market participants will also closely monitor developments relating to the India-US trade deal. 

 

"Market participants view this move (in rupee) as a possible signal of improving sentiment, with expectations building around progress on a potential US–India trade agreement," a dealer at brokerage firm said. 

 

The rupee is likely to move in a range of 89.00-90.00 against the dollar. Immediate technical resistance for the rupee is pegged at 89.00.

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India Rupee - World FX: Yen drops post BoJ Ueda's comments; dollar index up

 

	AT 1430 IST	HIGH	LOW	PREVIOUS
GBP/USD	1.3373	1.3387	1.3363	1.3381
EUR/USD	1.1712	1.1729	1.1703	1.1724
NZD/USD	0.5749	0.5783	0.5745	0.5772
AUD/USD	0.6604	0.6622	0.6600	0.6612
USD/JPY	156.9050	156.9390	155.5020	155.5440
USD/CAD	1.3788	1.3797	1.3771	1.3775
EUR/JPY	183.7690	183.8420	182.2700	182.3700
CHF/USD	1.2571	1.2595	1.2561	1.2593
EUR/CHF	0.9315	0.9322	0.9311	0.9307

 

NEW DELHI – The yen slumped 0.8% against the dollar as Bank of Japan Governor Kazuo Ueda offered few hints on the timing and pace of future rate hikes, even as he left the door open to further tightening. The Bank of Japan raised interest rates by 25 basis points on Friday to a three-decade high, as widely expected. 

 

"The pace of future rate hikes will depend on data and economic developments at the time," he said. "We will make an appropriate decision so that we're not behind the curve on inflation, and that we can make a smooth landing toward our inflation target."

 

The euro was down 0.1% against the dollar after the European Central Bank kept its policy rates on hold Thursday and ECB President Christine Lagarde went out of her way to say all options remained on the table. The central bank also revised upwards some of its growth and inflation forecasts, a move investors saw as a likely end to further cuts in borrowing costs in the near term. 

 

The pound sterling fell 0.1% against the greenback after the Bank of England reduced interest rates on Thursday after a narrow vote by policymakers. However, it signalled that the already gradual pace of lowering borrowing costs might slow further. Data released Friday showed the UK posted another larger-than-expected budget deficit in November and borrowing in past months was revised higher, indicating persistent strain on public finances. 

 

The dollar index rose, primarily due to losses in the Japanese currency. At 1430 IST, the dollar index, which measures the strength in the dollar against a basket of six major currencies, was at 98.66, up from 98.42 Thursday and 98.39 Wednesday. The Australian dollar was down 0.1%. (Pratiksha)

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India Rupee: Premium hits over 3-yr high on surplus dlr liquidity in system

 

	AT 1345 IST	AT 0900 IST	HIGH	LOW	PREVIOUS(AT 1530 IST)
Spot rupee per $1	90.1275	90.1325	89.9500	90.2900	90.2400
1-year dlr/rupee fwd (paise)	253.70	254.21	255.84	249.60	251.34

 

NEW DELHI – The one-year dollar-rupee forward premium hit an over three-year high as banks bought dollars for forward delivery noting the surplus dollar liquidity in the system, dealers said. "The RBI (Reserve Bank of India) has been selling (dollars) in spot but not receiving in forwards, so that has led to a lot of dollars in the system," a dealer at a foreign bank said. 

 

The central bank aggressively sold dollars in the spot market Wednesday, leading to the Indian unit logging its biggest one-day gain in nearly two months. Market participants speculated that the central bank sold around $3 billion-$5 billion Wednesday. However, the RBI has not been neutralising its spot interventions by selling dollars for forward delivery, leading to surplus dollar liquidity in the system, dealers said.

 

Premiums also gained owing to corporates deploying excess dollars through near-term foreign exchange swaps amid the year-end, dealers said. Further, a fall in US Treasury yields also boosted the forward premiums, they said. US Treasury yields ended lower Thursday after a softer-than-expected US inflation data heightened hope of more rate cuts by the US Federal Reserve. The 10-year US bond yield fell to 4.12% Thursday from 4.16% Wednesday. 

 

 

At 1345 IST, the one-year exact period dollar-rupee forward premium was 2.81%, against Thursday's close of 2.78%. The premium hit a high of 2.84?rlier in the day, its highest level since October 2022. On an absolute basis, the premium was 253.70 paise, against Thursday's close of 251.34 paise. (Pratiksha)

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India Rupee: Gives up most gains as importers persistently buy dollars

 

	AT 1230 IST	AT 0900 IST	HIGH	LOW	PREVIOUS(AT 1530 IST)
Spot rupee per $1	90.2175	90.1325	89.9500	90.2225	90.2400

 

NEW DELHI – The rupee erased most of its earlier gains against the dollar as banks persistently bought dollars on behalf of importers, who wanted to make the most of the relatively lower dollar-rupee levels, dealers said. The Indian currency touched a high of 89.9500 a dollar earlier in the day. 

 

"Importers totally lapped up these levels. I was expecting rupee to move to 90.20 (a dollar)," a dealer at a private-sector bank said. "Slowly, rupee should go back to around 90.50." 

 

Further, a rise in the dollar index, tracking losses in the Japanese yen, also weighed on the Indian unit, dealers said. The yen fell sharply after the Bank of Japan delivered a rate hike of 25 basis points, in a widely expected move. At 1230 IST, the dollar index, which measures the strength in the dollar against a basket of six major currencies, was at 98.56, up from 98.42 Thursday and 98.39 Wednesday.

 

The Indian currency had surged earlier in the day as the Reserve Bank of India likely sold dollars in the offshore non-deliverable forwards market before the spot market opened, dealers said. A rise in domestic equities also supported the Indian unit, they said. At 1230 IST, both the Nifty 50 and Sensex were up 0.5?ch.  

 

For the rest of the day, the rupee is seen moving between 89.90 and 90.40 against the greenback. Dealers peg immediate technical resistance for the rupee at 89.90 a dollar and support at 90.50. (Pratiksha)

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India Rupee: Technical levels for rupee - Dec 19

 

NEW DELHI – At 1138 IST, the rupee was at 90.1500 per dollar. At 0900 IST, the rupee was at 90.1325 a dollar, against the previous close of 90.2400 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	91.00	90.80	89.70	89.50
Private-sector bank	-	90.50	89.50	-
Brokerage firm	91.00	90.60	89.90	89.50
Brokerage firm	91.20	91.00	89.80	89.20

 

(Pratiksha)

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India Rupee: Rises above 90/$1 as RBI likely sells dlrs in offshore NDF mkt

 

	AT 0945 IST	AT 0900 IST	HIGH	LOW	PREVIOUS(AT 1530 IST)
Spot rupee per $1	89.9925	90.1325	89.9500	90.1500	90.2400

 

NEW DELHI – The rupee rose sharply against the dollar, moving above the 90-per-dollar mark, as the Reserve Bank of India likely sold dollars in the offshore non-deliverable forwards market before the spot market opened, dealers said.

 

"I was expecting some depreciation in rupee after the Bank of Japan decision, but looks like we are not going to see any downside for some time," a dealer at a state-owned bank said. "The appreciation theme will continue."

 

Before the domestic spot market opened, the Indian unit was trading around 90.23 a dollar in the offshore NDF market. However, it opened at 90.1325 a dollar in the spot market, thanks to the RBI's intervention, some dealers said. The Indian unit had 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. Noting the sustained intervention by the central bank, most traders unwound their long dollar positions, which also supported the local unit, they said. 

 

The Bank of Japan raised interest rates on Friday to a three-decade high and signalled its readiness for further hikes beyond next year. As the move was widely expected, the yen fell against the dollar, leading to a rise in the dollar index. At 0945 IST, the dollar index, which measures the strength in the dollar against a basket of six major currencies, was at 98.51, up from 98.42 Thursday and 98.39 Wednesday.

 

For the rest of the day, the rupee is seen moving between 89.80 and 90.40 against the greenback. Dealers peg immediate technical resistance for the rupee at 89.90 a dollar. (Pratiksha)

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 India Rupee: Expected range for rupee - Dec 19

 

NEW DELHI – 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	90.40	90.00
State-owned bank	90.30	90.10
Private-sector bank	90.40	90.10
Foreign bank	90.60	90.00
Brokerage firm	90.30	90.10
Brokerage firm	90.65	90.05
Brokerage firm	90.70	90.00

 

 

 

 

 

 

 

 

 

 

(Pratiksha)

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India Rupee - Asia FX: Mixed ahead of BoJ decision; South Korean won falls

 

NEW DELHI – Asian currencies moved on a mixed note against the dollar as market participants awaited a policy decision by the Bank of Japan on Friday. The central bank is widely expected to raise interest rates to a three-decade high and pledge to keep hiking borrowing costs. Investors will watch out for BoJ Governor Kazuo Ueda's comments after the policy decision for further cues on the interest rate outlook. 

 

Market participants also assessed the US Federal Reserve's rate trajectory after data released Thursday showed US consumer prices increased less than expected on year in November. The Labor Department's Bureau of Labor Statistics did not publish month-to-month CPI changes after the 43-day shutdown of the government prevented the collection of October data. The US CPI rose 2.7% year-on-year, against a 3.1% increase forecast by economists polled by Reuters. 

 

The South Korean won fell 0.3% against the dollar. The Bank of Korea will hold an internal meeting of the board members and senior officials to discuss foreign exchange rates on Friday, Reuters reported, citing officials. The central bank had said on Wednesday that headline inflation next year could exceed earlier forecasts if the won stays at its current level against the dollar. 

 

The Indonesian rupiah was up 0.1% against the greenback. Japan's Finance Minister Satsuki Katayama and Indonesian central bank governor Perry Warjiyo signed a memorandum of cooperation to encourage the use of local currencies in all bilateral transactions. 

 

The Taiwan dollar was flat against the US unit after the central bank left the benchmark discount rate unchanged at 2% at a quarterly meeting on Thursday. The central bank raised its economic growth forecast for the year due to booming exports of tech goods to the US. The Phillipines peso fell 0.1%, while the Malaysian ringgit rose 0.1% against the dollar. The Chinese yuan was flat against the US unit. (Pratiksha)

 

End

 

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

 

Edited by Avishek Dutta

 

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