Rupee Strengthens to 89.96 per Dollar as Oil Prices Ease, RBI Support Seen

The Indian rupee staged a notable recovery in early trade on Friday, appreciating 24 paise to 89.96 against the U.S. dollar, buoyed by steady corporate dollar inflows and softer global crude oil prices. The rebound comes after the currency touched successive record lows earlier this week, prompting expectations of intervention by the Reserve Bank of India (RBI).

Early Trade Snapshot

At the interbank foreign exchange market, the rupee opened at 90.19, briefly slipped to 90.22, and then strengthened to 89.96, marking its strongest level of the session so far. On Thursday, the rupee had already shown signs of stabilisation, closing 18 paise higher at 90.20 per dollar.

Earlier in the week, on December 16, the domestic currency had slipped past the psychologically important 91-per-dollar level for the first time, raising concerns over persistent pressure from global factors.

What’s Supporting the Rupee

Forex market participants attributed Friday’s gains to a combination of factors:

• Corporate dollar inflows, which improved near-term liquidity

• Cooling crude oil prices, with Brent trading below the $60-per-barrel mark

• Reduced speculative pressure, following sharp volatility in recent sessions

Anil Kumar Bhansali, Head of Treasury and Executive Director at Finrex Treasury Advisors LLP, said speculative activity has eased for now, though intraday swings cannot be ruled out. He noted that the rupee is likely to trade in a 90–90.50 range in the near term.

Global Cues and Dollar Movement

The U.S. dollar index, which tracks the greenback against six major currencies, was marginally higher at 98.46, indicating limited global dollar weakness.

Meanwhile, Brent crude futures slipped 0.27% to $59.66 per barrel, offering relief to India, a major oil importer, and helping temper pressure on the currency.

Bhansali also pointed to the latest U.S. inflation data, which came in lower than expected, but cautioned that incomplete data collection could make upcoming CPI readings more significant for currency markets.

Equity Markets and Capital Flows

Domestic equity markets provided additional support to sentiment. The Sensex rose 375.98 points to 84,857.79, while the Nifty gained 110.60 points to 25,934.15 in early trade.

Foreign Institutional Investors (FIIs) were net buyers on Thursday, purchasing shares worth ₹595.78 crore, according to exchange data—an encouraging sign amid recent volatility.

Policymakers Play Down Rupee Weakness

Addressing concerns over the currency’s recent slide, Sanjeev Sanyal, a member of the Economic Advisory Council to the Prime Minister (EAC-PM), said he was not worried about the rupee’s movement.

Speaking at the India Economic Conclave 2025, Sanyal argued that many fast-growing economies—including China and Japan—have experienced phases of currency weakness during periods of rapid expansion. He reiterated that since the 1990s, India has largely allowed the rupee to find its market-determined level, with the RBI intervening only to curb excessive volatility.

Outlook

While Friday’s gains offer short-term relief, analysts caution that the rupee remains sensitive to global interest rate expectations, crude oil trends, and capital flows. For now, easing oil prices and RBI’s presence in the market appear to be providing a stabilising cushion after weeks of sustained pressure.