Rupee avoids new low as RBI steps in to control excess volatility

The rupee fell for the fifth consecutive session on Tuesday, with persistent outflows from equities amid global risk-off sentiment, dealers said. The Reserve Bank of India likely intervened in the foreign exchange market via dollar sales, which helped the local currency avoid a new low.

 

The rupee fell up to 91.06 per dollar during the day, near the record low of 91.08 per dollar. It settled at 90.98 per dollar, against the previous close of 90.92 per dollar. The Indian unit hit an all-time closing low of 91.03 per dollar on December 16, 2025.

 

“The continued global uncertainties, including US pressure on Greenland, have led to a risk-off sentiment in markets,” said Sameer Karyatt, executive director and head of trading, DBS Bank India.

 

 

“This has led to strong demand for precious metals, with gold and silver prices touching all-time highs. The risk-off sentiment, along with strong offshore hedging in USD-INR, has led to USD-INR touching 91 per dollar. The current macro environment is likely to maintain depreciating pressure on the rupee,” Karyatt said.

 

The local currency has depreciated by 6.05 per cent in the current financial year so far. In January, it fell 1.21 per cent against the dollar.

 

The rupee is seen remaining sensitive to corporate demand for dollars and portfolio flows, with market participants remaining cautious amid a lack of positive cues, dealers said.

 

“There is no positive cue for the market, and dollar demand is there. The RBI intervened at the 91 per dollar mark,” said a dealer at a state-owned bank.

 

Market participants said the rupee’s performance continues to be driven by structural demand–supply imbalances rather than any weakening in domestic fundamentals. They said episodes of US dollar softness and shifting global headlines provided only fleeting relief, failing to offset persistent local flows.

 

“Foreign portfolio investor (FPI) outflows continued to weigh on sentiment. Concerns over India’s recent 30 per cent tariff on US pulses have added to trade deal uncertainty, with neither side willing to ease tariffs,” said Anil Kumar Bhansali, head of treasury and executive director, Finrex Treasury Advisors LLP.

 

Selling by foreign portfolio investors amid global uncertainties resulted in the benchmark equity markets falling over 1 per cent on Tuesday, which also had a rub-on effect on the Indian currency.