RBI’s heavy intervention triggers rupee’s biggest single-day gain in seven months

Rupee sharply recovers against US dollar, gains 1% intraday

Heavy intervention by the Reserve Bank of India (RBI) helped the Indian rupee stage its strongest intraday recovery in seven months on December 17, thus snapping a prolonged bout of weakness against the US dollar.

The domestic currency rebounded sharply during the early morning session after sustained dollar selling by state-owned banks, widely seen as acting on behalf of the central bank, which helped ease volatility and stabilise market sentiment.

At 09:40 AM, the local currency was trading at 90.0963 against the US dollar, as compared to 91.0762 at open and 91.0325 against the greenback at previous close.

In percentage terms, it recovered 1.03 percent, its highest since May 23, 2025, when it appreciated 1.05 percent.

“RBI intervened heavily to take spot down with market continuously moving up. The rupee made a high of 89.75 before importers came to buy the dips and took rupee lower to 90.18. Expect rupee to move back to 91.00 levels slowly and steadily as RBI has created shorts and will be required to buy back the dollar,” said Anil Kumar Bhansali, Head of Treasury and Executive Director Finrex Treasury Advisors LLP.

Rupee

Today, the local currency opened at another record low due to persistent demand for dollar due to delay in the trade deal between US and India and outflows of funds by the foreign investors.

The currency has been under pressure in the last few weeks especially due to delay in the trade deal, which led to the currency hitting fresh record lows. On the other hand, the limited intervention by the RBI was also adding to the pain.

Reserve Bank of India conducted a swap yesterday, infusing Rs 45,000 crore into the system, and is set to buy bonds on the 18th to inject another Rs 50,000 crore of liquidity.

Meanwhile, the US dollar was steady on Wednesday and near its lowest since the start of October after data showed the labour market remained soft, leaving investors on edge about when the next rate cut from the Federal Reserve is likely to come.

The dollar index, which measures the US currency against six rivals, was at 98.193, hovering near the lowest level since October 3 which it hit on Tuesday. The index is down 9.5% this year, on pace for its steepest annual decline since 2017.