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Informist, Monday, Dec. 22, 2025

 

By Kabir Sharma

 

MUMBAI – The rupee ended sharply lower against the dollar on Monday as banks persistently bought the greenback on behalf of oil marketing companies, dealers said. Dollar purchases by other importers also weighed on the local currency, they said. 

 

"Even though oil prices are not very high, people are scared that they will shoot up if anything escalates," a dealer at a state-owned bank said. 

 

Following a 1.3% rise last week, the rupee closed at 89.6500 per dollar on Monday, compared with Friday's close of 89.2700 per dollar. On Monday, the Indian currency moved within a 28-paise range. 

 

The Indian unit started the day lower against the dollar as oil marketing companies rushed to stock up on the commodity after reports that the US was still pursuing a third oil tanker near Venezuela on Sunday, dealers said. The US also intercepted oil vessels on Friday. At 1612 IST, the February Brent crude contract was at $61.35, up 1.5% from Friday. 

 

The rupee gained some support from a rise in local equities as capital flows turned positive at the end of last week, dealers said. The Nifty 50 and the Sensex both ended 0.8% higher Monday. 

 

A weak dollar index also supported the rupee, dealers said. The dollar index fell as the euro and pound sterling rose. At 1630 IST, the dollar index, which measures the dollar's strength against a basket of six major currencies, was at 98.48, down from 98.72 Friday but up from 98.42 on Thursday.

 

Meanwhile, the People's Bank of China on Monday maintained its 1-year and 5-year loan prime rates at 3% and 3.5%, respectively, for the seventh consecutive meeting. The one-year rate impacts nearly all new and existing loans, while the five-year benchmark influences mortgages. 

 

	AT 1530 IST	AT 0900 IST	HIGH	LOW	PREVIOUS(AT 1530 IST)
Spot rupee per $1	89.6500	89.5400	89.4425	89.7200	89.2700
1-year dlr/rupee fwd (paise)	273.10	256.56	274.48	255.21	255.60

 

FORWARDS

The one-year dollar-rupee forward premium rose further and touched an over three-year high for the second day in a row, as banks bought dollars for forward delivery amid surplus dollar liquidity in the system, dealers said.

 

The central bank aggressively sold dollars in the spot market last week, resulting in the Indian unit logging its biggest one-day gain in over three years Friday. However, the RBI has not been neutralising its spot interventions by selling dollars for forward delivery, which has led to surplus dollar liquidity in the system, dealers said.

 

Premiums also gained as corporates deployed excess dollars in near-term foreign exchange swaps at year-end, dealers said. A rise in US Treasury yields also failed to curb premiums, dealers said. Dealers said expectations that the interest rate differential between the US and India will widen, with the US Federal Reserve expected to cut rates further, have also led to the rise in premiums. 

 

At 1345 IST, the one-year exact-period dollar-rupee forward premium was 3.05%, against Friday's close of 2.86%. On an absolute basis, the premium was 273.10 paise, against Friday's close of 255.60 paise.

 

OUTLOOK

On Tuesday, the rupee may open steady against the dollar, as market participants remain cautious about developments in the US interception of Venezuela's oil tankers. "The INR has depreciated today in response to the uptick in oil prices. Given a light calendar this week, oil price and geo-political developments will be crucial drivers," ICICI Bank said in a note. 

 

Following the rupee's sharp appreciation last week, banks will also be cautious about Reserve Bank of India intervention through dollar sales. Market participants will also closely monitor developments relating to the India-US trade deal. 

 

Market focus now shifts to key US data, including the PCE price index, new home sales, and weekly jobless claims, which could drive fresh volatility. Investors also look forward to the release of the preliminary US Jul-Sept GDP data, scheduled for Tuesday. The data is expected to show that the US economy grew at an annualised pace of 3.2% in the third quarter, moderately down from 3.8% in the second quarter.

 

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

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India Rupee - World FX: Yen recovers from 11-mo low; euro, sterling rise

 

	AT 1521 IST	HIGH	LOW	PREVIOUS
GBP/USD	1.3420	1.3424	1.3376	1.3377
EUR/USD	1.1729	1.1739	1.1707	1.1711
NZD/USD	0.5782	0.5785	0.5748	0.5754
AUD/USD	0.6639	0.6642	0.6608	0.6620
USD/JPY	157.4570	157.7010	157.2300	157.7530
USD/CAD	1.3773	1.3803	1.3770	1.3794
EUR/JPY	184.6850	184.9220	184.2450	184.6900
CHF/USD	1.2601	1.2605	1.2566	1.2538
EUR/CHF	0.9307	0.9325	0.9307	0.9323

 

MUMBAI – After falling to an 11-month low, the Japanese yen recovered and was up 0.2% against the dollar. The yen slumped earlier as the Bank of Japan failed to provide any cues on further rate hikes in its statement or at the post-policy press conference. 

 

On Friday, Japan's central bank hiked the policy rate by a quarter percentage point to a 30-year high of 0.75%, in a move that was clearly signalled in advance. The accompanying statement indicated willingness to persist with tightening policy. However, Kazuo Ueda, the central bank's governor, during a news conference emphasised that the timing and speed of additional increases relied on forthcoming economic data.

 

Japan's leading currency diplomat, Atsushi Mimura, Monday said officials would implement measures in response to extreme exchange-rate fluctuations, cautioning about the possibility of intervention following last week's central bank meeting, which led to renewed declines in the yen.

 

The euro was up 0.2% against the dollar. European Central Bank Governing Council member and head of Lithuania's central bank, Gediminas Simkus, said during European trading hours Monday that the Eurozone economic growth has improved, but is still sluggish, with inflation seen staying near 2% in the medium term.

 

The pound sterling was up 0.3% agains the dollar after economic data come on expected lines. The Office for National Statistics said that the UK economy grew at a quarterly pace of 0.1%, in line with preliminary estimates. At 1524 IST, the dollar index, which measures the strength in the dollar against a basket of six major currencies, was at 98.52, down from 98.72 Friday but up from 98.42 Thursday.

 

Investors look forward to the release of the preliminary US Jul-Sept GDP data, scheduled for Tuesday. The numbers are expected to show that the US economy grew at an annualised pace of 3.2% in the third quarter, moderately down from 3.8% in the second quarter. (Kabir Sharma)

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India Rupee: Premium at over 3-year high on excess dlr liquidity in system

 

	AT 1348 IST	AT 0900 IST	HIGH	LOW	PREVIOUS(AT 1530 IST)
Spot rupee per $1	89.5550	89.5400	89.4425	89.7200	89.2700
1-year dlr/rupee fwd (paise)	269.10	256.56	269.48	255.21	255.60

 

MUMBAI – The one-year dollar-rupee forward premium rose further and was at an over-three-year high for the second day in a row as banks bought dollars for forward delivery noting the surplus dollar liquidity in the system, dealers said. "There is excess of dollars in the system right now so everyone is buying for forward tenures," a dealer at a private bank said. "The near-term forwards are also up because people are unsure of year-end liquidity conditions," he said. 

 

The central bank aggressively sold dollars in the spot market last week, leading to the Indian unit logging its biggest one-day gain in over three years on Friday. Market participants speculated that the central bank sold around $3 billion-$5 billion on Wednesday alone. 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 rise in US Treasury yields also failed to limit the rise in premiums, dealers said. 

 

Dealers said the expectations of the interest rate differential between the US and India widening, with the US Federal Reserve expected to cut rates further, has also led to the rise in premiums. 

 

At 1345 IST, the one-year exact period dollar-rupee forward premium was 3.01%, against Friday's close of 2.86%. On an absolute basis, the premium was 269.10 paise, against Friday's close of 255.60 paise. (Kabir Sharma)

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India Rupee: Remains sharply down on oil cos' dlr buys; risk sentiment hit

 

	AT 1234 IST	AT 0900 IST	HIGH	LOW	PREVIOUS(AT 1530 IST)
Spot rupee per $1	89.5625	89.5400	89.4425	89.7200	89.2700
1-year dlr/rupee fwd (paise)	265.71	255.21	266.48	255.21	254.08

 

MUMBAI – The rupee remained sharply down against the dollar as banks persistently bought the greenback on behalf of oil marketing companies, dealers said. Other importers also bought the greenback as the risk sentiment was affected due to the interception of Venezuelan oil tankers by the US, they said. 

 

"Only panic buying for oil is happening, not much more," a dealer at a state-owned bank said. "Importers are worried that the situation might escalate soon," he said. 

 

Oil marketing companies rushed to stock up on the commodity after reports said the US was still in pursuit of a third oil tanker near Venezuela on Sunday, dealers said. The US had intercepted oil vessels on Friday as well. At 0941 IST, the February contract of Brent crude was at $61.17, up 1.2% over Friday. 

 

Dealers, however, said a rise in local equities and a fall in the dollar index supported the Indian unit. At 1235 IST, the Nifty 50 and the Sensex were up 0.6?ch. 

 

For the rest of the day, the rupee is seen moving between 89.30 and 90.00 against the greenback. Dealers peg immediate technical support for the rupee at 89.80 a dollar. (Kabir Sharma)

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India Rupee: Technical levels for rupee - Dec 22

 

MUMBAI – At 1135 IST, the rupee was at 89.6400 per dollar. At 0900 IST, the rupee was at 89.5400 a dollar, against the previous close of 89.2700 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	90.50	90.20	89.50	89.00
Brokerage firm	90.30	90.00	89.30	89.00
Brokerage firm	90.40	90.20	89.20	88.60

(Kabir Sharma)

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India Rupee: Slumps as oil cos buy dlrs fearing further rise in prices

 

	AT 0938 IST	AT 0900 IST	HIGH	LOW	PREVIOUS(AT 1530 IST)
Spot rupee per $1	89.6775	89.5400	89.4425	89.7100	89.2700
1-year dlr/rupee fwd (paise)	256.10	255.21	256.10	255.21	254.08

 

MUMBAI – The rupee fell sharply against the dollar as banks rushed to purchase the greenback on behalf of oil marketing companies, which were cautious of a sharp increase in prices of the commodity, dealers said. "They (oil marketing companies) are rushing to buy (dollars) before this escalates," a dealer at a private bank said.

 

Oil marketing companues rushed to stock up on the commodity after reports that the US was still in pursuit of a third oil tanker near Venezuela on Sunday, dealers said. The US had intercepted oil vessels on Friday as well. At 0941 IST, prices of the February contract of Brent crude was at $60.93, up 0.8% over Friday. 

 

Dealers said a rise in local equities and a fall in the dollar index supported the Indian unit. At 0934 IST, the Nifty 50 and the Sensex were up 0.6?ch. 

 

The dollar index was slightly lower in early trade Monday even as the Japanese yen slumped to an 11-month low. US Federal Reserve Bank of Cleveland President Beth Hammack Sunday said monetary policy was in a good place to pause and assess the effects of 75 basis points of rate cuts in the economy during the first quarter.

 

At 0936 IST, the dollar index, which measures the strength in the dollar against a basket of six major currencies, was at 98.62, down from 98.72 Friday but up from 98.42 Thursday.

 

For the rest of the day, the rupee is seen moving between 89.30 and 90.00 against the greenback. Dealers peg immediate technical support for the rupee at 89.80 a dollar. (Kabir Sharma)

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India Rupee: Expected range for rupee - Dec 22

 

MUMBAI – 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	90.00	89.00
Private-sector bank	89.80	89.20
Brokerage firm	90.20	89.20
Brokerage firm	90.05	89.30

 

 

 

 

 

 

 

(Kabir Sharma)

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India Rupee - Asia FX: Up; Thai baht at 4-yr high ahead of policy meet Wed

 

MUMBAI – Most Asian currencies were higher against the dollar as the greenback eased following a rise in the euro and pound sterling. The dollar index was lower even as the Japanese yen fell to an 11-month low against the greenback. At 0825 IST, the dollar index, which measures the strength in the dollar against a basket of six major currencies, was at 98.60, down from 98.72 Friday but up from 98.42 Thursday.

 

The Thai baht rose to its highest level against the dollar in more than four years, heaping pressure on the Thailand central bank to stem the rally ahead of its policy decision on Wednesday. The baht has risen more than 8% this year, making it the second best performer in Asia. 

 

The offshore Chinese yuan was steady against the dollar on Monday after the Chinese central bank left interest rates unchanged at its monetary policy meeting. The People's Bank of China maintained its loan prime rates for 1-year and 5-year at 3% and 3.5%, respectively, for the seventh consecutive meeting. The one-year rate impacts nearly all new and existing loans, while the five-year benchmark influences mortgages. 

 

Post the outcome, the Australian dollar and the New Zealand dollar rose 0.1% against the dollar each. Both countries are major trading partners of China. 

 

The Taiwan dollar was up 0.1% against the dollar. Taiwan's central bank has relaxed limitations on dollar sales by exporters to curb the Taiwan dollar's decline, Reuters reported on Friday. Recently, the Taiwan dollar declined against the dollar because of capital outflows from foreign investors selling Taiwan stocks, at one point reaching its lowest level in over seven months. 

 

The Indonesian rupiah was down 0.1% against the dollar. Indonesia introduced new foreign exchange regulations targeting commodity exporters. Under the updated framework, companies exporting raw materials must deposit a portion of their foreign currency earnings into state-owned banks. This requirement limits the immediate conversion of such funds into rupiah, effectively reducing pressure on the local currency and aligning with broader monetary stability goals. (Kabir Sharma)

 

End

 

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

 

Edited by Saji George Titus

 

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