Rupee trades steady as RBI intervention cushions global pressures

The rupee moved in a narrow range against the US dollar in early trade on Thursday (December 18), supported by central bank intervention even as global risk aversion and uncertainty over India–US trade talks weighed on sentiment.

The local currency opened at 90.35 per dollar, strengthened marginally to 90.32, and slipped to 90.38 in early deals.

The rupee had staged a sharp recovery in the previous session after briefly hitting all-time lows.

RBI presence stabilises the currency

Traders attributed the rupee’s rebound to dollar sales by public sector banks on behalf of the Reserve Bank of India.

“The PSU banks were sellers of dollars on Wednesday for the RBI, and the intervention could have been as high as USD 6 billion,” said Anil Kumar Bhansali, Head of Treasury and Executive Director at Finrex Treasury Advisors LLP.

Bhansali expects the rupee to trade in the 90.00–91.00 range during the session, with support near 90.25 and resistance around 90.75.

Trade uncertainty and importer demand cap upside

Market participants said the lack of progress in India–US trade negotiations continues to limit gains in the currency, alongside sustained dollar demand from importers and corporates.

Oil prices offer relief, dollar remains firm

Brent crude climbed 0.67% to $60.08 per barrel, easing pressure on India’s external balance. At the same time, the dollar index edged higher to 98.41, preventing a sharper appreciation in the rupee.

Equities cautious, flows supportive

Domestic equity benchmarks traded lower amid weak global cues, with the Sensex down 114 points and the Nifty lower by 41 points in early deals. Foreign institutional investors, however, remained net buyers, purchasing equities worth ₹1,171.71 crore in the previous session.

Recent move seen as adjustment, not stress

Market experts said the recent volatility reflects a valuation adjustment rather than a deterioration in fundamentals.

“The pressure on the rupee has been driven by capital flows and external trade-related uncertainty, not by a breakdown in India’s macro stability,” said N Arunagiri, CEO of TrustLine Holdings.

He added that REER metrics suggest the rupee is now closer to fair value, limiting the scope for sustained depreciation from current levels.

-With PTI inputs