The RBI’s intervention in the spot market was seen around the 90.30-90.40 levels, forex market analysts said.

Rupee recovers from record low on RBI intervention, ends at 89.9 against dollar

Indian Rupee Reverses Six-Day Losing Streak Against US Dollar

The Indian rupee has reversed its six-day losing streak and appreciated against the US dollar, according to analysts. This upturn is primarily attributed to likely intervention by the central bank and the unwinding of speculative positions.

Central Bank Intervention

The RBI's intervention in the spot market was seen around the 90.30-90.40 levels, forex market analysts said.

Market participants speculated that the RBI may have executed a sell–buy swap, which supplied dollars in the spot market and helped smooth volatility without draining reserves outright.
This intervention lifted the rupee off its record lows, said Dipti Chitale, CEO, Mecklai Financial Services Pvt Ltd.

Impact on Forward Premiums and Dollar Index

Forward premiums continued to rise, reflecting increased interest differential and hedging demand. The dollar index (DXY) weakened as markets began pricing in a Fed rate cut expected next week.

The softer dollar globally provided additional support to the rupee's recovery, said Chitale.
The DXY fell to 98.78 on Thursday, compared to the previous close of 98.85.

Underlying Bias and Foreign Fund Outflows

According to HDFC Securities' Parmar, the rupee's underlying bias remains unsupportive, burdened by sustained foreign fund outflows and an elevated trade deficit.

On Thursday, foreign portfolio investors (FPIs), sold Rs 4,752.4 crore of domestic equities, compared to Rs 4,033.46 crore sold the previous day.
So far in the current year (2025), foreign investors have offloaded Rs 13,121 crore of local shares, according to the National Securities Depository Ltd (NSDL) data.

Near-Term Outlook and Reserve Bank of India Governor's Remarks

In the near term, the spot USD/INR pair faces technical resistance at 90.45 and support at 89.70, Parmar said.

Market participants will closely watch Reserve Bank of India Governor Sanjay Malhotra's remarks on the rupee in his policy address on Friday (December 5).

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