The rupee witnessed range-bound trade in the morning session on Friday (January 2, 2026), appreciating by 6 paise to 89.92 against the US dollar as thin liquidity conditions accentuated everyday demand-supply imbalances, keeping the rupee tilted toward weakness.

Forex traders said the USD/INR pair is expected to trade in a narrow range as the 90 level is being protected by the Reserve Bank of India.

Moreover, the support from positive domestic equities was offset by sustained foreign fund outflows.

At the interbank foreign exchange market, the rupee opened at 89.95 against the U.S. dollar, then gained some ground and touched 89.92, rising by six paise from its previous close.

On Thursday, the rupee depreciated 10 paise to close at 89.98 against the U.S. dollar.

“Unless RBI comes and sells dollars heavily, the movement is going to be in small ranges as seen in the last three sessions. The pair is seen in a holding pattern between 89.80 and 90, considering the narrow range,” said Anil Kumar Bhansali, Head of Treasury and Executive Director at Finrex Treasury Advisors LLP.

Bhansali further noted that corporate demand, FPI demand, and government demand have been the salient features of the rupee over the past year, during which it fell by more than 5% and became the worst-performing Asian currency, though partly protected by the RBI.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading marginally down by 0.15% at 98.17.

Brent crude, the global oil benchmark, was trading 0.38 per cent higher at $61.08 per barrel in futures trade.

“With early-year liquidity still thin and domestic fundamentals offering a mixed but stable backdrop, the rupee appears set to remain range-bound in the near term. As long as USD/INR stays below the 90 handle, the balance of risks tilts mildly in favour of the rupee,” CR Forex Advisors MD Amit Pabari said, adding that against this backdrop, USD/INR is expected to trade in a 89.30–90.20 range.

On the domestic equity market front, the 30-share benchmark index Sensex climbed 158.19 points to 85,346.79 in early trade, while the Nifty was up 55.8 points to 26,202.35.

Foreign institutional investors offloaded equities worth Rs 3,268.60 crore on Thursday, according to exchange data.

On the domestic macroeconomic front, gross GST collections rose 6.1% to over ₹1.74 lakh crore in December 2025, on slow growth in revenues from domestic sales following the sweeping tax cuts, according to government data released on Thursday (January 1, 2026).

Gross Goods and Services Tax (GST) revenue in December 2024 was over ₹1.64 lakh crore.

The rupee recovered from the record low level and settled with a gain of 11 paise at 88.66 (provisional) against the U.S. dollar on Tuesday (November 4, 2025) boosted by falling crude oil prices overseas.

Forex traders said a firm dollar, outflow of foreign funds and subdued domestic equity markets prevented a sharp gain in the Indian currency.

At the interbank foreign exchange, the rupee opened at 88.55 and hit the intra-day high of 88.28 against the greenback. The unit also touched a low of 88.67 before ending the session at 88.66 (provisional) against the dollar, up 11 paise from its previous closing level.

On Monday (November 3, 2025), the domestic unit, declining for the third consecutive session, ended 7 paise lower at 88.77 against the US dollar, near its all-time closing level.

The rupee had recorded its lowest-ever closing level of 88.81 against the dollar on October 14.

The foreign exchange markets will be closed on Wednesday on account of Prakash Gurpurb holiday.

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, rose 0.09 per cent to 99.80.

Brent crude, the global oil benchmark, fell 1.37% to $64 per barrel in futures trading.

On the domestic equity markets front, the Sensex tanked 519.34 points or 0.62% to settle at 83,459.15, while the Nifty declined 165.70 points or 0.64% to end at 25,597.65.

Foreign institutional investors sold equities worth ₹1,883.78 crore on Monday (November 3, 2025), according to exchange data.

A monthly survey released on Monday (November 3, 2025) showed India’s manufacturing sector activity strengthened in October, buoyed by Goods and Services Tax relief, productivity gains and tech investment, even as international sales increased at a weaker pace.

The seasonally adjusted HSBC India Manufacturing Purchasing Managers’ Index (PMI) rose from 57.7 in September to 59.2 in October, indicating a quicker improvement in the sector’s health.