Archive · 18 Dec 2025
Rupee Rebounds on RBI Intervention
The Indian rupee had a big comeback on Wednesday.
It had been losing value for five days, but the Reserve Bank of India (RBI) stepped in and sold a lot of dollars to help it recover.
The RBI sold between $5 billion and $6 billion to stop the rupee from falling too much.
This was the biggest one-day recovery in over seven months.
The rupee started the day at 91.07, went up to 89.98, and ended at 90.38.
The rupee has been struggling because of uncertainty about trade deals, money leaving the country, and a strong US dollar.
The RBI's action showed they want to keep the rupee stable, not set a fixed value.
Foreign investors have been taking money out of India, which has also put pressure on the rupee.
The RBI has been active in the market, selling dollars to support the rupee.
On Thursday, the rupee is expected to open little changed to marginally weaker, with traders watching for the RBI's follow-through to its heavy intervention amid a risk-off backdrop.
Meanwhile, the Indian stock market has been stable, with the Nifty 50 index trading in a tight range.
Experts believe the market may see healthy growth in the next year due to expected earnings growth and healthy growth-inflation dynamics.
The Nifty 50 is expected to reach 29,000 by the end of FY26, driven by earnings growth and supported by steady tax revenues, a stable GST regime, rising disposable income, and an anticipated US trade deal.
The Indian rupee rebounded sharply on Wednesday, recovering Rs 1.04 intraday from its previous close due to aggressive dollar selling by the RBI.
The RBI sold around $5 billion to $6 billion to prevent further depreciation of the rupee, marking its sharpest intraday recovery in over seven months.
The rupee opened at 91.07, hit an intraday high of 89.98, and closed at 90.38, up 64 paise from its previous close.
Pressure on the rupee is driven by uncertainty around the India-US trade deal, continued FII outflows, and persistent US dollar buying.
Foreign portfolio investors have withdrawn over $2.7 billion in the first two weeks of December 2025, with net outflows of $18 billion for the year so far.
- Who
- Reserve Bank of India (RBI), Foreign Institutional Investors (FIIs), Domestic Investors, Government of India
- What
- Rupee rebound due to RBI dollar selling and stock market resilience despite trade deal uncertainty
- When
- Wednesday, December 2025
- Where
- Interbank foreign exchange market, Mumbai, Indian stock market
- Why
- To prevent further depreciation of the rupee and stabilize the stock market amid uncertainty around the India-US trade deal and FII outflows
Rupee Depreciation
Stock Market Resilience
Currency Market Dynamics
Rupee Depreciation
The Indian Rupee has fallen around 6% in 2025 due to uncertainty around the India-US trade deal and aggressive FII outflows, with no sign of recovery until the trade deal is signed.
Stock Market Resilience
The Indian stock market has shown resilience, with the Nifty 50 index trading in a tight range of 25,250 to 26,300, supported by domestic investor participation and government measures like GST rationalization and mutual fund fee cuts.
Market Liquidity and Intervention
Rupee Depreciation
The currency market faces thinning liquidity, one-sided price movements, and increased reliance on central bank intervention, with the RBI selling $5 billion to $6 billion to prevent further depreciation.
Stock Market Resilience
The equity market benefits from balanced liquidity, with domestic investors, mutual funds, and long-term allocators absorbing selling pressure, enabling self-correction and stability.
Government and Regulatory Measures
Rupee Depreciation
The delay in the India-US trade deal and Trump's tariffs have put pressure on the rupee, with the RBI intervening only after the rupee crossed 91 against the US dollar.
Stock Market Resilience
Proactive government measures, such as GST rationalization and SEBI's reduction of mutual fund fees, have provided liquidity and supported the stock market, countering FII outflows.
- Rupee Opening
- 91.07
- Rupee Intraday High
- 89.98
- Rupee Closing
- 90.38
- RBI Dollar Selling
- $5 billion to $6 billion
- FPI Outflows (Dec 2025)
- $2.7 billion
- FPI Outflows (Year to Date)
- $18 billion
- Forex Reserves Decline
- $15 billion (June-Sept 2025)
- Expected Rupee Range
- 90.35-90.45
- Nifty 50 Year-to-Date Gain
- 9%
- Nifty 50 Target for FY26
- 29,000
Sources
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Rupee rebounds from record lows, closes higher at 90.24 after RBI intervention
