Rupee Rebounds Most In 7 Months On RBI's Huge Dollar Selling

Mumbai:  The Indian rupee on Wednesday staged a sharp turnaround snapping its five-day losing streak against the dollar, recovering Rs 1.04 intraday    from its previous close on aggressive dollar selling by the Reserve

Bank of India (RBI). According to traders, the RBI sold around $5 billion to $ 6 billion dollars during the day to prevent the rupee’s slide.

This was the rupee’s sharpest intraday recovery in more than seven months.

The pressure on the currency is being driven by uncertainty around the  India-US trade deal, continued foreign institutional investor (FII) outflows and persistent US dollar buying.

“The opening today was lower at 91.07 but the RBI who had been watching from the sidelines in the past one week suddenly entered the market and sold dollars to halt further depreciation in the rupee beyond the 91 mark, helping the rupee to hit an intraday high of 89.99. Initially during the selling there were hardly any quotes available in the inter-bank market. The rupee ultimately closed at 90.38 with the market wary of going long in view of the RBI selling. But overall with RBI short, the dollar-rupee will again pick up and move higher. With high year end premiums, the importer's hedging cost was also higher. The rupee is expected between 90.00 to 91.00 tomorrow,” said Anil Bhansali, head treasury at Finrex Trading Advisors.

At the interbank foreign exchange market, the rupee opened at 91.07 but rebounded on strong RBI intervention during early morning trade to hit an intraday high of 89.98, a Rs 1.04 paise gain from its previous close of 91.02. It finally ended the day at 90.38, up 64 paise compared to its previous close.

“The central bank stepped in to curb excessive volatility and prevent a disorderly move, signaling its discomfort with rapid depreciation beyond recent ranges. While the broader bias for the USD-INR remains

influenced by the trade deal and capital flow dynamics, today’s action reinforces the RBI’s role as a stabilizer rather than a defender of fixed levels,” said Abhishek Goenka, founder and chief executive officer at IFA Global.

On Tuesday, the rupee had slipped to a fresh all-time low, crossing the 91 mark, making it one of the weakest major currencies globally this year and the weakest in Asia in 2025 so far. In just 13 days the rupee has slipped from 90 to a dollar to 91 level. The rupee is currently the worst-performing Asian currency, with 6 percent depreciation witnessed in 2025 so far. The data also indicates that the current fall is the quickest (in terms of number of days) of rupee, scaled to 5 per USD. In less than a year the rupee has slid from 85 to 90 per dollar.

Foreign portfolio investors have withdrawn over $2.7 billion in the first two weeks of December alone, placing the month among the largest episodes of net outflows recorded this year. Over the year so far,FPIs have net sold over $18 billion of local stocks, on track to be the worst yearly outflow on record.

The RBI has intervened around $18 billion in the forex market during June-Sept, and by another ~$10 billion in Oct’25. So, the total amount stands at around $30 billion, while forex reserves declined by $15 billion during the same period said SBI Research report.