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Informist, Monday, Dec. 29, 2025

 

By Kabir Sharma

 

MUMBAI – The rupee ended lower against the dollar Monday as banks bought the greenback on behalf of oil marketing companies and Indian corporates, dealers said. Volume in the foreign exchange market was lower than usual as many market participants were on leave due to year-end holidays, they said.

 

"Some bids were there from oilers and companies for year-end payments," a dealer at a private-sector bank said. "FPIs (foreign  portfolio investors) were also buying, which has been a trend recently." . 

 

Contrary to the recent past, the rupee moved in a narrow range of 11 paise on Monday. The Indian unit closed the day at 89.9750 a dollar against Friday's close of 89.8500 a dollar.

 

The rupee started the day nearly steady against the dollar as the impact of dollar buys by oil marketing companies was offset by weakness in the dollar, dealers said. 

 

The dollar was lower against major currencies in early trade, which supported the Indian unit, as expectations of further rate cuts by the US Federal Reserve next year weighed on the currency. Markets are preparing for US President Donald Trump to select a new Fed chair to succeed Jerome Powell, whose tenure concludes in May.

 

The US central bank reduced the federal funds rate by 25 basis points at its December policy meeting, adjusting the target range to 3.50-3.75%. It implemented a total of 75 bps of rate reductions in 2025 in response to a softening labour market and moderately high inflation. Markets are pricing in two more rate cuts next year, which may further weaken the greenback. 

 

At 1538 IST, the dollar index, which measures the dollar's strength against a basket of six major currencies, was at 98.03, against 98.05 Friday and 97.95 Wednesday.

 

As the rupee neared the 90.00 a dollar level, state-owned banks stepped in to sell dollars on behalf of the Reserve Bank of India to prevent runaway depreciation in the Indian unit, dealers said. "They are intervening in thin liquidity that's why they are not aggressive, otherwise it will go down to 35-40 (89.35-89.40)," a dealer at a brokerage firm said. 

 

Dealers said the uncertainty about the completion and nuances of the trade deal also weighed on the rupee. Quoting a commerce ministry official earlier this month, Informist had reported that chief negotiators from India and the US had concluded their discussions on the proposed Bilateral Trade Agreement and the remaining issues now required intervention at the ministerial level, including the commerce minister and the prime minister.

 

Some banks bought dollars for foreign fund outflows from Indian equities, which also weighed on the local currency. The Nifty 50 and the Sensex ended 0.4% lower each on Monday. 

 

	AT 1530 IST	AT 0900 IST	HIGH	LOW	PREVIOUS(AT 1530 IST)
Spot rupee per $1	89.9750	89.8800	89.8750	89.9875	89.8500
1-year dlr/rupee fwd (paise)	252.50	251.50	253.00	250.50	249.40

 

FORWARDS

The one-year dollar-rupee forward premium was largely unchanged Monday, tracking steady US Treasury yield levels, dealers said. A stable rupee in the spot market also limited movement in the premiums, they said. US Treasury yields fell by a basis point on Friday after Christmas Day, concluding a quiet holiday-shortened week. 

 

Premiums had surged to over 3-year highs over the past few days due to excess dollar liquidity in the system after the RBI aggressively sold dollars to protect the rupee from sharp depreciation last week, dealers said. Some dealers speculated that the central bank also received premiums to limit the rise while simultaneously selling dollars in the spot market to curb sudden depreciation in the Indian unit.

 

The announcement of a swap auction by the RBI also weighed on premiums, dealers said. Amid excess dollar liquidity in the system, the RBI Tuesday said it would conduct a three-year, dollar-rupee buy-sell swap auction on Jan. 13 for $10 billion.

 

At 1530 IST, the one-year exact period dollar-rupee forward premium was 2.81%, against Friday's close of 2.79%. On an absolute basis, the premium was 252.50 paise, against Friday's close of 250.37 paise.

 

OUTLOOK

On Tuesday, the rupee is expected to open steady against the dollar as market participants remained cautious about developments in the US-India trade deal. Following the rupee's sharp appreciation in the previous week, banks will also be cautious about the RBI's intervention through dollar sales.

 

Year-end demand for dollars from Indian corporates is also expected to weigh on the local currency. Traders will monitor the flows to and from Indian equities, they said. 

 

The rupee is expected to move in the 89.50-90.20 range against the dollar. Immediate technical support for the rupee is pegged at 90.00.

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India Rupee - World FX:Yen soars as BoJ meet minutes hint at more rate hikes

 

	AT 1355 IST	HIGH	LOW	PREVIOUS
GBP/USD	1.3489	1.3514	1.3477	1.3497
EUR/USD	1.1777	1.1786	1.1754	1.1772
NZD/USD	0.5813	0.5833	0.5808	0.5834
AUD/USD	0.6707	0.6727	0.6701	0.6715
USD/JPY	156.2390	156.5260	156.0550	156.5700
USD/CAD	1.3688	1.3697	1.3658	1.3678
EUR/JPY	184.0580	184.4200	183.5158	184.3565
CHF/USD	1.2673	1.2688	1.2655	1.2661
EUR/CHF	0.9291	0.9300	0.9283	0.9290

 

MUMBAI – The Japanese yen was up 0.3% against the dollar on Monday. At its policy meeting in December, the Bank of Japan increased its policy rate from 0.50% to 0.75%. A recap of views published early Monday indicated that certain board members recognised the need for additional rate hikes in the coming future. Members noted that the declining yen and increasing long-term interest rates were partially a result of the central bank's policy rate being insufficient compared to inflation. 

 

The euro rose 0.1% against the dollar. The euro was supported by US President Donald Trump's comments signalling optimism on talks to reach a peace deal to end the war in Ukraine. On Sunday, Trump said discussions aimed at resolving the Russia-Ukraine conflict had advanced following his meeting with Ukrainian President Volodymyr Zelenskyy in Florida, although he conceded that contentious territorial disputes persisted. "I do think we're getting a lot closer, maybe very close," Trump told reporters after the talks.

 

The Australian dollar was down 0.2% against the dollar. Minutes of the Reserve Bank of Australia's December meeting revealed that board members were increasingly unsure whether monetary policy was still restrictive enough. The minutes also showed the board was ready to enforce stricter policies if inflation does not decline as expected.

 

The greenback weakened against major currencies on Monday on expectations of more rate cuts by the US Federal Reserve in 2026. At 1354 IST, the dollar index, which measures the dollar's strength against a basket of six major currencies, was at 98.04, against 98.05 Friday and 97.95 Wednesday. (Kabir Sharma)

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India Rupee:Premium unchanged tracking steady US ylds; RBI swap auction eyed

 

	AT 1328 IST	AT 0900 IST	HIGH	LOW	PREVIOUS(AT 1530 IST)
Spot rupee per $1	89.9625	89.8800	89.8750	89.9875	89.8500
1-year dlr/rupee fwd (paise)	250.50	251.50	253.00	250.50	249.40

 

MUMBAI – The one-year dollar-rupee forward premium was largely unchanged Monday tracking steady US Treasury yields, dealers said. A stable rupee in the spot market also limited movement in the premiums, they said. "Not much happening, liquidity is thin, it will stay like this until the swap," a dealer at a private-sector bank said. 

 

US Treasury yields fell by a basis point on Friday after Christmas Day, concluding a quiet holiday-shortened week. 

 

Premiums had surged to over 3-year highs over the past few days due to excess dollar liquidity in the system after the Reserve Bank of India aggressively sold dollars to protect the rupee from sharp depreciation last week, dealers said. Some dealers speculated that the central bank also received premiums to limit the rise while simultaneously selling dollars in the spot market to curb sudden depreciation in the Indian unit.

 

The announcement of a swap auction by the RBI also weighed on premiums, dealers said. Amid excess dollar liquidity in the system, the RBI Tuesday said it would conduct a three-year, dollar-rupee buy-sell swap auction on Jan. 13 for $10 billion.

 

At 1325 IST, the one-year exact period dollar-rupee forward premium was 2.78%, against Friday's close of 2.79%. On an absolute basis, the premium was 250.50 paise, against Friday's close of 250.37 paise. (Kabir Sharma)

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India Rupee: In thin band; bks' dlr sales for RBI offset oil cos' dlr buys

 

	AT 1321 IST	AT 0900 IST	HIGH	LOW	PREVIOUS(AT 1530 IST)
Spot rupee per $1	89.9525	89.8800	89.8750	89.9875	89.8500
1-year dlr/rupee fwd (paise)	250.50	251.50	253.00	250.50	249.40

 

MUMBAI – The rupee was in a narrow range against the dollar Monday as banks' dollar buys for oil marketing companies and Indian corporates was offset by their dollars sales on behalf of the Reserve Bank of India, dealers said.

 

"Pressure is there from both ends, they (RBI) are there but are not as aggressive," a dealer at a state-owned bank said. "Outflows are happening from equities which are also playing a role."  

 

Banks bought dollars for foreign fund outflows from Indian equities, which also weighed on the Indian unit, dealers said. At 1318 IST, the Nifty 50 and the Sensex were down 0.4?ch. 

 

Dealers said a broad-based weakness in the dollar index also supported the Indian unit. The greenback weakened on expectations of more rate cuts by the US Federal Reserve in 2026. 

 

At 1320 IST, the dollar index, which measures the dollar's strength against a basket of six major currencies, was at 97.95, against 98.05 Friday and 97.95 Wednesday.

 

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 90.00 a dollar.  (Kabir Sharma)

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India Rupee: Technical levels for rupee - Dec 29

 

MUMBAI –  At 1210 IST, the rupee was at 89.9700 per dollar. At 0900 IST, the rupee was at 89.8800 a dollar, against the previous close of 89.8500 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	90.30	90.00	89.50	89.35
Brokerage firm	90.00	89.97	89.60	89.47
Brokerage firm	90.20	90.00	89.60	89.40

 

(Kabir Sharma)

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India Rupee: Tad down on oil cos', corporates' dlr buys; weak dlr supports

 

	AT 0949 IST	AT 0900 IST	HIGH	LOW	PREVIOUS(AT 1530 IST)
Spot rupee per $1	89.9225	89.8800	89.8750	89.9625	89.8500
1-year dlr/rupee fwd (paise)	252.50	251.50	253.00	251.50	249.40

 

MUMBAI – The rupee was slightly lower against the dollar as banks bought the greenback on behalf on oil marketing companies and some Indian corporates, dealers said. "Oilers are there as usual and some year-end buying by private banks for corporates," a dealer at a state-owned bank said. 

 

Dealers said if the rupee touches 90.00 a dollar again, the Reserve Bank of India might sell dollars to prevent runaway depreciation in the Indian unit. "If RBI intervenes around 90.00 in thin liquidity, then we might see a pullback towards 89.30 to 89.50 levels," a dealer at a brokerage firm said. 

 

However, "In the absense of RBI and capital inflows, the rupee will continue to be under pressure and again target 90.00 (a dollar) plus levels again," the dealer said. 

 

A rise in local equities supported the Indian unit, dealers said. At 0945 IST, the Sensex and the Nifty 50 were up 0.2?ch. A weak dollar also supported the rupee, dealers said. 

 

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 90.00 a dollar.  (Kabir Sharma)

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India Rupee: Expected range for rupee - Dec 29

 

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	89.95	89.65
Brokerage firm	89.97	89.47
Brokerage firm	90.20	89.60

 

 

 

 

 

 

 

(Kabir Sharma)

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India Rupee - Asia FX: Mixed; South Korean won rises on hint of intervention

 

MUMBAI – Asian currencies were mixed against the dollar on Monday after the greenback weakened on expectations of more rate cuts by the US Federal Reserve in 2026. The US central bank reduced the federal funds rate by 25 basis points at its December policy meeting, adjusting the target range to 3.50-3.75%. The Fed implemented a total of 75 bps of rate reductions in 2025 in response to a softening labour market and moderately high inflation.

 

At 0725 IST, the dollar index, which measures the dollar's strength against a basket of six major currencies, was at 97.95, against 98.05 Friday and 97.95 Wednesday.

 

The South Korean won surged 0.5% against the dollar. The currency gained after officials indicated that excessive currency weakness was unwanted and that the foreign exchange market would soon witness the government's "strong resolve".

 

The currency strengthened following a joint text message from the central bank and finance ministry, indicating they had held several meetings in the past two weeks to address the won's recent decline. The ministry announced a set of new tax initiatives aimed at stabilising the foreign exchange market, while the National Pension Service is reportedly beginning "strategic" currency hedging. 

The Thai baht was down 0.5% against the dollar. In November, Thailand's trade deficit soared to $2.73 billion, mainly due to a 17.6% increase in imports, outpacing a 7.1% rise in exports, data showed on Monday. This trend raises concerns regarding the possible economic dangers associated with a robust baht, which could reduce Thailand's competitiveness in global markets. Exports make up more than half of the country's GDP, and the robustness of the baht presents difficulties, particularly with decreasing global demand

 

The Malaysian ringgit rose 0.1% against the dollar and continued its upward momentum on Monday, opening higher for the 12th consecutive session ahead of a holiday-shortened trading week leading into the New Year. (Kabir Sharma)

 

End

 

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

 

Edited by Tanima Banerjee

 

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