Author: Aashiya Jain | EQMint | Finance News
Rupee partially recovers due to the RBI intervention.
On 16 Dec 2025, the rate opened at 90.9 rupee per dollar. The currency reached a new high of 91.07 rupee per dollar, bouncing on Wednesday at a low rate of 91.07 rupee per dollar, 0.05% lower than its previous closing. It has clawed back part of its loss likely due to the RBI intervention.
Now a lot of marketing competitors and traders are saying the RBI intervention was similar to the one that took place in October and November when the rate per dollar was hitting new lows. On Tuesday, it hit the 91 rupee per dollar mark for the first time in the year during intraday trade. While some of the loss was recovered when the market closed at 90.93 rupee per dollar, that is 15 paise weaker. Traders said that the dip was due to the weaker dollar and the sharp fall of crude oil prices.
The Current State of the Rupee in Global Markets
The central bank intervened sharply as the currency has been hitting record lows from the past four sessions. This is supposed to be the strongest intervention in the last seven months triggering the strongest recovery rate in the intraday trade from seven months i.e., in July when the dollar rate was 87.49 rupee per dollar.The currency had been weighed down by sustained portfolio outflows and the stalemate in USA – India trade talks. It has been under stress from the last seven sessions.
One of the key factors influencing its movement has been the trajectory of the US dollar index. Periodic weakness in the dollar has offered temporary relief to emerging market currencies, including this one. However, this support has been uneven, as investors continue to favor dollar-denominated assets during periods of uncertainty. Expectations that US interest rates may remain elevated for longer have limited sustained capital inflows into emerging markets, keeping it vulnerable to renewed bouts of selling.
Global investors have been reallocating funds toward safer assets amid uncertainty over global growth and unresolved trade negotiations. The lack of clarity surrounding the direction of US–India trade talks has further dampened sentiment, limiting the ability to stage a durable recovery. The recent sharp fall in crude prices helped cushion its decline by easing concerns over widening trade and current account deficits. Lower oil prices reduce the demand for dollars from oil marketing companies, temporarily easing pressure on the domestic currency. However, analysts caution that any rebound in crude prices could quickly reverse these gains.
Against this backdrop, the Reserve Bank of India’s intervention has been instrumental in preventing excessive volatility. Market participants view the central bank’s actions not as an attempt to defend a specific exchange rate level, but rather to smooth sharp movements and maintain orderly market conditions. By supplying dollars during periods of intense selling pressure, the RBI has helped curb speculative activity and restore short-term confidence. However, traders note that intervention alone cannot reverse underlying structural pressures on the currency.
Looking ahead, the near-term outlook is likely to remain range-bound with a downside bias. Much will depend on global risk sentiment, movements in the dollar index, and trends in crude oil prices. Domestically, any signs of improving capital inflows or progress in trade negotiations could provide support. At the same time, continued vigilance from the central bank is expected as currency markets navigate a period of heightened uncertainty.
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Resouorce link: Reuters
