The Indian rupee rises for the second day in a row thanks to RBI support

The Indian rupee finished higher for a second straight session on Wednesday on likely state-owned banks’ dollar selling, which traders said could come on behalf of the central bank, reversing pressure from slightly softer Asian signals.The rupee ended 0.3% higher at 89.88, its highest closing level in a week, after closing at 90.1650 in the previous session. It reached an intraday high of 89.86.

The Reserve Bank of India again resorted to heavy intervention to support the rupee, nine traders said, pushing the currency past the 90-per-dollar mark.

Wednesday’s intervention followed a familiar playbook that the RBI used repeatedly last year when it intervened aggressively to push the rupee higher, aiming to disrupt one-way moves. Previous interventions, according to bankers, stemmed from a build-up of speculative long dollar positions and expectations of a consistent depreciation of the rupee.

Before the central bank’s intervention on Wednesday, the rupee had fallen about 1% in the past two weeks.

The local currency rupee continues to face headwinds from continued overseas selling of Indian equities, a trend that has continued from 2025 into the new year, in addition to continued uncertainty over a US-India trade deal.

“Going forward, resilient macro fundamentals and an improvement in capital flows as US-related trade uncertainty subsides should ease pressure on the rupee. However, we expect the currency to remain within a range as the RBI rebuilds FX reserves as portfolio inflows recover,” Goldman Sachs said in a note. It predicts the currency will be around 89.50 in three months and 91 in six months.

(Reporting by Dharamraj Dhutia; Editing by Nivedita Bhattacharjee and Janane Venkatraman)