Rupee Gains 12 Paise to 89.51 on RBI Liquidity Boost, Weaker Dollar

The rupee appreciated 12 paise to 89.51 against the U.S. dollar in early trade on Wednesday (December 24, 2025), supported by a major liquidity infusion announced by the Reserve Bank of India (RBI) and weakness in the American currency overseas.

At the interbank foreign exchange market, the rupee opened at 89.56, strengthened to 89.51 and briefly touched 89.65 against the dollar. On Tuesday, the domestic currency had closed at 89.63.

Forex traders said sentiment improved after the RBI announced liquidity support of around ₹3 lakh crore, which is expected to help stabilise the rupee. The central bank on Tuesday said it would purchase government securities worth ₹2 lakh crore and conduct a $10 billion buy/sell dollar-rupee swap auction to inject liquidity into the banking system.

“The rupee started the day stronger after the RBI announced sufficient liquidity for the markets, which will also help keep rupee weakness under control,” a trader said.

Anil Kumar Bhansali, Head of Treasury and Executive Director at Finrex Treasury Advisors LLP, said the softer dollar index and firm Asian currencies aided the rupee. “With the dollar index easing after strong U.S. GDP growth of 4.3%, the rupee has managed to claw back. It is likely to remain broadly in the 89–90 range as the RBI protects both sides while attempting to cut its short dollar positions,” he said.

He added that the RBI has been actively managing the currency to prevent excessive volatility, stepping in to cap sharp depreciation while also buying dollars to check undue appreciation.

The dollar index, which measures the greenback against a basket of six currencies, was down 0.07% at 97.87. Brent crude futures were marginally higher at $62.39 per barrel.

In equities, benchmark indices traded higher, with the Sensex rising 63.82 points to 85,588.66 and the Nifty gaining 32.80 points to 26,209.95. However, foreign institutional investors remained net sellers, offloading equities worth ₹1,794.80 crore on Tuesday, according to exchange data.

The latest liquidity measures follow earlier RBI operations, including ₹1 lakh crore worth of open market operations (OMO) purchases and a $5 billion USD/INR buy/sell swap auction for a three-year tenor conducted earlier this month.