RBI Intervention Stabilises Rupee Despite Global Risk Aversion

The rupee traded within a tight range against the US dollar in early trade on Thursday (December 18), finding support from suspected central bank intervention even as global risk-off sentiment and lingering uncertainty over India–US trade negotiations weighed on market confidence.

The domestic currency opened at 90.35 per dollar, edged up briefly to 90.32, and then slipped to 90.38 in early trade. The narrow movement followed a sharp rebound in the previous session, when the rupee recovered after briefly touching record lows.

RBI Intervention Provides Stability

Traders attributed the rupee’s recovery to dollar selling by public sector banks, widely believed to be acting on behalf of the Reserve Bank of India, which helped contain volatility and stabilise the currency. Despite the support, the rupee’s upside remained capped. Market participants pointed to the lack of meaningful progress in India–US trade discussions, along with persistent dollar demand from importers and corporates, as key restraining factors.

Oil Prices Ease Pressure, Dollar Strength Persists

Crude oil prices offered some relief, with Brent rising 0.67% to $60.08 per barrel, helping ease concerns around India’s external account. However, strength in the US currency offset these gains, as the dollar index edged up to 98.41.

Equities Mixed, Capital Flows Supportive

Domestic equity markets traded cautiously amid weak global cues, with the Sensex down 114 points and the Nifty lower by 41 points in early trade. Despite the decline, foreign institutional investors remained net buyers, purchasing equities worth ₹1,171.71 crore in the previous session, lending some support to the broader market sentiment.

Also Read: Gold Prices Steady Ahead of US Inflation Data; Silver Outperforms

Volatility Seen as Market Adjustment

Market experts noted that the recent swings in the rupee reflect a phase of valuation adjustment rather than any underlying stress in macroeconomic fundamentals, suggesting the currency remains fundamentally stable despite near-term volatility.

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