Rupee snaps 5-day losing streak; logs sharpest recovery in over 7 months

The rupee rose 0.73% to 90.37 per dollar, snapping a five-session fall, as dealers cited likely RBI dollar sales to curb volatility after the currency hit fresh lows

The rupee snapped its five-day losing streak on Wednesday, witnessing its sharpest intraday recovery in more than seven months.

 

The domestic currency appreciated 0.73 per cent to settle at 90.37 a dollar on Wednesday against the previous close of 91.03. This was on the back of a likely intervention by the Reserve Bank of India (RBI) via dollar sales, said dealers.

 

The move follows the rupee hitting record lows in recent weeks, sparking debate over why the RBI has not intervened more aggressively to support the currency.

 

The domestic currency had breached the 91-dollar mark on Tuesday, weakening to a fresh low for the fourth consecutive session. This came as persistent foreign outflows and delay in trade deal with the US further weighed on sentiment.

 

The local currency moved from 90 to 91 per dollar in nine trading days.

 

“The rupee saw a sharp intraday recovery on Wednesday, strengthening from levels near ₹91.05 to around ₹90, aided by timely intervention from the RBI. The central bank stepped in to curb excess volatility and prevent a disorderly move, signalling its discomfort with rapid depreciation beyond recent ranges,” said Abhishek Goenka, founder and chief executive officer (CEO), IFA Global.

 

He added that the broader bias for the dollar-rupee remains influenced by trade deal and capital flow dynamics. And, that Wednesday’s action reinforces the RBI’s role as a stabiliser rather than a defender of fixed levels.

 

According to Sakshi Gupta, principal economist, HDFC Bank, RBI’s intervention does not suggest an attempt to defend any specific level of the rupee against the dollar.

 

Similar interventions have been seen over the past couple of months and appear to be in response to the sharp rupee volatility.

 

“The RBI is focused on ensuring orderly movement in the rupee and stepping in to curb undue volatility. There remains a possibility for the rupee to again move towards the 91-per-dollar level in the coming weeks,” she said.

 

A report by State Bank of India (SBI) has highlighted that the rupee is currently in a depreciating regime.

 

According to the report, the domestic currency may exit this phase after which it is likely to regain some lost ground against the greenback. This may occur in the second half of the next financial year.

 

“Consistent with our empirical analysis, the rupee is currently in a depreciating regime. It is likely to exit the regime, thereafter, we believe that the rupee may bounce back strongly in the second half of next financial year,” it said.

 

It added that since April 2, when the US announced sweeping tariff hikes across economies, the rupee has depreciated by 5.7 per cent against the dollar, the steepest decline among major currencies.

 

“This has occurred despite brief phases of appreciation driven by optimism around a potential US-India trade deal. Notably, while the rupee has emerged as the worst-performing major currency over this period, it has not been the most volatile. This pattern clearly indicates that the 50 per cent tariff imposed on India has been one of the key drivers of the current phase of rupee depreciation,” the report added.

 

The rupee has depreciated by 5.27 per cent against the dollar in 2025. In December so far, it has witnessed a 1.01 per cent fall.