Rupee strengthens below 90/$ amid RBI intervention via dollar sales

The rupee appreciated on Wednesday on the back of intervention by the Reserve Bank of India (RBI) via dollar sales, dealers said. The local currency settled at 89.88 per dollar, against the previous close of 90.17 per dollar, after touching an intraday high of 89.83 per dollar. Market participants said the central bank intervened to halt the one-way depreciation of the rupee, which has weakened around 0.7 per cent in the last two weeks.

 

“The move was driven by active support measures from the Reserve Bank of India, aimed at smoothing excess volatility and preventing disorderly moves in the currency. While this intervention-led strength helped the rupee stabilise below the psychologically important 90 level, broader macro headwinds, including sustained dollar demand, capital flow dynamics and trade deal uncertainty, remain in play,” said Abhishek Goenka, founder and chief executive officer of IFA Global.

 

The rupee has depreciated by 4.91 per cent in the current financial year so far.

 

“The Indian rupee recorded its most significant single-session gain since mid-December, emerging as a regional outperformer despite an imbalance between dollar demand and supplies. This rally was largely catalysed by strategic central bank intervention, as the RBI moved aggressively to neutralise the impact of sustained foreign capital outflows,” said Dilip Parmar, senior research analyst, HDFC Securities.

 

“Market sentiment remains sensitive to the ongoing delay in US-India tariff deals, which has continued to exert downward pressure on the rupee. However, the RBI’s proactive defence of the currency has provided a necessary floor for the rupee against a strengthening greenback in the past two days. From a technical standpoint, spot rupee has support at 89.40 and resistance at 90.30,” he added.

 

The Indian unit, which depreciated 4.75 per cent against the dollar in 2025, was the worst-performing Asian currency.

 

Market participants said the RBI’s continued short positions in the market could pose risks when these trades eventually mature. Foreign portfolio investors (FPIs) remain steady equity sellers and dollar buyers, exerting daily downward pressure on the rupee. At the same time, the RBI has repeatedly signalled it will not tolerate a one-sided move in the currency, prompting speculators to unwind long dollar positions.

 

Latest data showed the central bank’s outstanding net short dollar position in the rupee forward market rose further to $66.04 billion by the end of November, against $63.6 billion at the end of October.