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 rose 3 paise to settle at 89.65 (provisional) against the U.S. dollar on Tuesday (December 23, 2025) on the back of a weaker greenback. However, a rise in global crude oil prices, coupled with foreign capital outflows, prevented sharper gains in the local unit, according to forex traders.

At the interbank foreign exchange, the rupee opened at 89.67 and traded in the range of 89.59-89.85 before settling at 89.65 (provisional) against the greenback, up 3 paise from its previous close.

The rupee on Monday (December 23, 2025) pared initial gains to settle slightly down by 1 paisa at 89.68 against the U.S. dollar. Anuj Choudhary, Research Analyst, Mirae Asset ShareKhan, said, “The rupee gained on Tuesday (December 23), on a weak U.S. dollar index.

“However, a surge in crude oil prices capped sharp gains. We expect the rupee to trade with a positive bias on overall weakness in the U.S. dollar and a bounce back in the domestic equities,” Mr. Choudhary said Adding that the delay in the trade deal between India and the U.S. is expected to weigh on the rupee at higher levels.

“Investors may watch out for Q3 GDP data from the U.S. on Tuesday (December 23). USD-INR spot price is expected to trade in a range of ₹89.30-89.90,” he added. Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading 0.34% lower at 97.95.

Brent crude, the global oil benchmark, was trading 0.18% higher at $62.18 per barrel in futures trade. On the domestic equity market front, Sensex declined 42.64 points to settle at 85,524.84, while the Nifty was marginally up by 4.75 points to 26,177.15. Foreign institutional investors offloaded equities worth ₹457.34 crore on Monday (December 23), according to exchange data.