Analysts said the market is positioning for a stronger dollar as the RBI remains heavily short forwards and adopts a “soft-touch” intervention strategy.
The Indian currency (INR) opened marginally stronger at 89.44 per US dollar (USD) and closed at an all-time low of 89.5475 per USD, down nine paise from the previous close of 89.4575. The previous low of the INR was 89.49 per USD on November 21.
The rupee hit a record intraday low of 89.79 per US dollar (USD) on Monday. The intraday high was 89.42. So, there was an intraday move of 37 paise in the currency.
Abhishek Goenka, founder and CEO of IFA Global, noted that the market is trying to position long dollars.
“It knows that the RBI is severely short of strikers, including NDF [likely over $70 billion short]and may want to use intervention firepower judiciously. It appears that the RBI does not want to change the direction of the market but rather adopt a soft intervention strategy to prevent unilateral depreciation of the rupee,” he said.
US trade deal
Goenka noted that a long-awaited trade deal with the US has proven elusive. “If we don’t get the trade deal done soon, the rupee may have to be used as leverage to offset the impact of rate differentials against peers and remain competitive. Deteriorating CAD dynamics and a dry spell in FPI flows are also weighing on sentiment,” he said.
Referring to the depreciation of the rupee to a new low against the USD, Dipti Chitale, CEO of Mecklai Financial Services, highlighted that continued equity outflows continue to dominate sentiment.
“FIIs have remained net sellers for five straight months since July, pulling ₹1.49 lakh crore from Indian equities and putting sustained pressure on the currency. The lack of RBI intervention is also weighing on the rupee,” she said.
Chitale believed that the pair remains broadly upside in the near term unless foreign flows stabilize or the broader dollar trend reverses.
Published on December 1, 2025
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