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 to trade at 89.51 against the greenback, providing a positive start to the forex session.
RBI's Liquidity Boost Fuels Rupee Strength
Forex market traders attributed the rupee's firm opening directly to a significant announcement from the Reserve Bank of India (RBI). The central bank declared it would provide sufficient liquidity for the financial markets, amounting to approximately Rs 3 lakh crore. This substantial infusion is designed to ensure smooth functioning in the banking system and has a direct impact on the currency's valuation.
Analysts noted that this proactive measure by the RBI serves a dual purpose. Primarily, it addresses systemic liquidity needs. Secondly, and crucially for the forex market, it arms the central bank with greater firepower to manage currency volatility. The ample liquidity allows the RBI to intervene effectively in the market to curb any excessive weakness in the rupee, thereby instilling confidence among traders.
Market Sentiment and Broader Implications
The immediate market reaction was positive, with the rupee starting the day on a stronger note. The assurance of liquidity acts as a buffer against speculative pressures and global dollar strength, which often impact emerging market currencies like the Indian rupee. By pre-emptively announcing this support, the RBI has signalled its commitment to maintaining stability in the forex market.
This development is closely watched by importers, exporters, and investors alike, as a stable rupee reduces hedging costs and uncertainty in cross-border transactions. The move on December 24, 2025, underscores the central bank's vigilant approach to managing external sector risks in a dynamic global economic environment.
While early trade showed a clear uptick, market participants will continue to monitor global oil prices, dollar index movements, and foreign fund flows for further directional cues. However, the RBI's liquidity backstop is expected to provide a solid foundation for the rupee in the near term, helping to keep sharp depreciation in check.
