The Indian rupee closed higher on Tuesday after recovering in late trade, settling at 89.79 against the US dollar, supported by equity market inflows into banking and financial stocks.
The domestic currency opened near the 90 level at 89.93 and weakened during the session, slipping to 89.94 in afternoon trade. However, late-session recovery helped the rupee trim losses and close on a stronger note.
Softer metal prices lift sentiment
A decline in global metal prices also aided the rupee. Prices of gold, silver and copper fell sharply on December 29 amid progress in peace-related discussions between the US and Ukraine over the Russia–Ukraine conflict. Volatility in metals was further influenced by China’s export restrictions, which are set to take effect from January 1, 2026.
Lower prices of gold and silver help reduce India’s import bill, easing dollar demand from importers and supporting the domestic currency.
Strong macroeconomic data added further support. India’s Index of Industrial Production (IIP) rose to a 25-month high of 6.7% in November, driven by strong manufacturing output, improved consumption demand and a recovery in mining activity. Improved economic momentum generally supports investor confidence and currency stability.
RBI intervention supports the rupee
Traders said the rupee’s downside was limited due to intervention by the Reserve Bank of India (RBI), which sold dollars to stabilise the currency during the session.
The rupee has been trading close to the 90 level in recent sessions, with central bank action helping contain sharp volatility in the foreign exchange market.
