The Indian rupee opened stronger against the US dollar in early trading on Wednesday, December 24, 2025, registering a notable gain. The domestic currency appreciated by 12 paise, moving to a level of 89.51 against the greenback compared to its previous close.
RBI's Liquidity Boost Fuels Rupee Strength
Forex market traders attributed this positive start directly to a significant move by the Reserve Bank of India (RBI). The central bank announced it would provide sufficient liquidity for the financial markets, amounting to approximately Rs 3 lakh crore. This substantial infusion is seen as a strategic measure to ensure smooth functioning and stability in the system.
Analysts pointed out that this proactive step by the RBI serves a dual purpose. Primarily, it addresses potential liquidity crunches, but it also arms the central bank with greater firepower to manage currency volatility. The availability of these funds allows the RBI to intervene effectively in the forex market to curb any excessive weakness in the rupee's value.
Market Sentiment and Broader Implications
The announcement has instilled confidence among market participants. By assuring ample liquidity, the RBI has signaled its commitment to maintaining orderly market conditions. This move is expected to help anchor the rupee and prevent sharp, destabilizing fluctuations against major global currencies like the US dollar.
The early trade gain of 12 paise to 89.51 reflects the immediate positive reception of the RBI's policy stance. Market watchers will now observe how this liquidity measure influences the rupee's trajectory throughout the trading session and its interplay with other global economic factors.
Looking Ahead for the Indian Currency
While the initial reaction has been favourable, the rupee's medium-term path will depend on a combination of domestic economic indicators and global dollar movements. However, the RBI's decisive action on liquidity provides a crucial buffer, giving the monetary authority enhanced control to manage the currency's stability and support the broader economic framework.
