The Indian rupee weakened against the US dollar on Wednesday, December 24, 2025, closing 16 paise lower. The domestic currency ended the trading session at 89.79 against the greenback, as interventions by the Reserve Bank of India (RBI) failed to stem the decline.
RBI Measures Fail to Boost Market Sentiment
Forex market traders reported that the central bank's recent announcements, including USD-INR swaps and Open Market Operations (OMO), did little to improve market confidence. Despite these strategic moves aimed at providing liquidity and stability, they were insufficient to counteract the prevailing negative pressures. The lack of positive response highlights the complex challenges facing the currency.
Strong Dollar Demand and Oil Prices Weigh Heavy
The rupee's depreciation was primarily driven by two powerful external forces. Firstly, there was strong demand for the US dollar in the global and domestic markets, bolstering the American currency's position. Secondly, rising crude oil prices exerted significant downward pressure on the rupee. As India is a major oil importer, higher global oil prices increase the nation's import bill, leading to greater demand for dollars and consequently weakening the rupee.
Implications and Market Outlook
The day's close at 89.79 marks a notable shift for the Indian currency. This movement suggests that domestic monetary tools are currently being overshadowed by broader global economic trends. Investors and analysts will be closely watching the RBI's next steps and monitoring international oil price fluctuations, as these will be critical factors determining the rupee's trajectory in the coming sessions. The market's tepid response to the RBI's actions indicates that more sustained or different measures may be required to stabilize the currency in the face of persistent dollar strength and expensive crude imports.
