Indian Rupee Gains Early Monday Amid Improved Market Sentiment

The Indian rupee showed signs of recovery in early Monday trading (December 22), building on its rebound from recent record lows as stronger risk appetite boosted emerging market assets.

The rupee rose 22 paise to 89.45 against the US dollar in early trade, after opening at 89.53. On Friday (December 19), it had closed at 89.67, following a sharp single-session gain.

Corporate Flows Provide Immediate Support

Traders noted that corporate dollar sales, combined with renewed foreign portfolio inflows into Indian equities, helped stabilise the rupee. Foreign investors have been net buyers over the past few sessions, offsetting earlier selling pressures.

A narrower merchandise trade deficit in November has also lent short-term support to the external balance, market participants said.

Central Bank Intervention Calms Volatility

The Reserve Bank of India’s dollar sales through state-run banks last week contributed to the rupee’s recovery from recent lows. Dealers said these interventions curbed intraday volatility and prevented disorderly movements in the currency market.

Oil Prices and Global Cues Remain Manageable

Brent crude hovered around the $60-per-barrel mark, easing concerns about rising import costs. Meanwhile, the US dollar index remained broadly steady, posing limited challenges for emerging market currencies, including the rupee.

Foreign Exchange Reserves Bolster Confidence

India’s foreign exchange reserves rose by $1.689 billion to $688.949 billion in the week ended December 12, according to RBI data, providing a buffer against external shocks.

Also Read: SEBI Rejected Media Reports; Clarifies No Changes to Short Selling Rules

Long-Term Pressure Persists

Despite the recent rebound, the rupee has depreciated about 4.1% so far in 2025, making it the weakest-performing currency in Asia, even as several regional peers have posted gains.

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