Indian Rupee Hits All-Time Low: Assessing RBI Intervention Efficacy

On December 17, 2025, the Indian rupee hit an all-time low of approximately 91.07 against the U.S. dollar [0]. In response, the Reserve Bank of India (RBI) intervened aggressively through measures including a $10 billion swap, ₹2 lakh crore open market operations (OMOs), and foreign asset sales [0]. These actions led to a 0.7% rally, pushing the rupee to 90.25 by December 18, 2025, before settling near 90.55 by December 19 [0]. As of the event date (December 22, 2025), domestic equity indices NSEI and BSESN closed 0.45% and 0.50% higher, respectively, supported by domestic institutional investor (DII) buying (₹3,812.37 crore) which offset foreign institutional investor (FII) outflows (₹1,794.80 crore) [0]. The rupee’s slide is driven by U.S. tariffs, ongoing FII outflows, and a trade stalemate, while the RBI’s interventions are characterized as “leaning against the wind” rather than reversing the trend [0].

1. RBI interventions provide temporary relief but lack sustainable effectiveness amid persistent external headwinds (U.S. tariffs, trade stalemate) [0].
2. Domestic investor (DII) buying has emerged as a critical support for Indian equities, cushioning the impact of FII outflows during rupee weakness [0].
3. The weak rupee creates a dual dynamic: benefiting export-oriented sectors like IT (improved currency conversion) while increasing the cost of imports, especially oil, which poses inflation risks [0].

• Risks
  : Continued FII outflows, amplified impacts of U.S. tariffs on trade, inflationary pressures from costlier imports, and potential depletion of RBI foreign exchange reserves [0].
• Opportunities
  : Export-oriented industries (IT, pharmaceuticals) may gain a competitive edge from the weak rupee; short-term relief in equity markets due to DII support [0].

• All-time rupee low: 91.07 against USD (December 17, 2025) [0].
• RBI interventions: $10 billion swap, ₹2 lakh crore OMOs [0].
• December 22, 2025 market data: NSEI (+0.45%), BSESN (+0.50%); FII outflows (₹1,794.80 crore), DII inflows (₹3,812.37 crore) [0].