Rupee Rebounds As RBI Steps In With Heavy Intervention

The Indian rupee staged a strong comeback on Friday, December 19, 2025, closing at 89.27 against the U.S. dollar, up more than 1% on the day. Market participants noted that the Reserve Bank of India likely intervened heavily in the forex market, selling dollars to shore up the currency before market close.  

Key highlights from the announcement include  

• The rupee’s rebound marked its sharpest single-day gain in seven months.  
• RBI reportedly sold dollars around the 91 level, curbing speculative positions and easing pressure on importers.  
• The intervention helped the rupee avoid breaching record lows, restoring short-term stability.  
• Foreign investor outflows and weak trade negotiations had earlier pushed the rupee to near-record weakness.  
• Analysts caution that while intervention provides temporary relief, structural reforms and stronger capital inflows are needed for long-term stability.  
• The move underscores RBI’s commitment to maintaining financial stability amid external shocks and domestic inflationary concerns.  

The decisive intervention highlights the central bank’s proactive stance in managing volatility, reassuring markets and investors of its readiness to act when required.  

Sources: Reuters, Business Standard, Livemint, Economic Times