Indian Rupee Stabilizes as RBI Signals Fresh Intervention – USD/INR Hovering Near 90.80

The Indian Rupee opened relatively flat on Thursday as market participants braced for potential Reserve Bank of India (RBI) support. The USD/INR currency pair hovered around the 90.80 level, with traders widely expecting the central bank to defend the currency again following aggressive dollar sales on Wednesday. If you’re wondering how much 17 dollars in Indian rupees equates to at current rates, the pair’s movement directly impacts that conversion—at 90.80, those 17 dollars would translate to approximately 1,543.60 rupees.

What’s Driving the USD/INR Pair?

RBI’s Defensive Stance Takes Center Stage

The Reserve Bank of India made headlines on Wednesday by launching a substantial dollar-selling offensive across both spot and non-deliverable forward markets, successfully capping the USD/INR rally that had climbed to a record 91.55. Market consensus suggests “high probability” of renewed intervention today, signaling the RBI’s determination to prevent further rupee depreciation. This currency has faced sustained selling pressure as foreign investors have been consistently trimming Indian equity positions due to ongoing US-India trade tensions.

Foreign Investment Sentiment Shifts

A notable turning point emerged in the foreign flows narrative. Throughout November, Foreign Institutional Investors remained net sellers across every trading session—until Wednesday flipped the script. FIIs executed net purchases worth Rs. 1,171.71 crore, marking their first positive day this month. While this reversal could temporarily bolster market risk appetite, analysts warn the euphoria will likely prove short-lived without concrete progress on US-India trade negotiations.

The Broader Dollar Picture: Waiting for Inflation Data

The USD/INR’s sideways consolidation mirrors broader US Dollar Index dynamics. The DXY, measuring the Greenback’s strength against six major currencies, drifted marginally higher near 98.45 as investors recalibrated rate-cut expectations.

Fed Rate Cut Odds Have Collapsed

Recent Fed communications drastically shifted market probabilities. With Fed Chair Jerome Powell emphasizing that “the bar for another interest rate cut is very high,” traders abandoned dovish positioning. The CME FedWatch tool now prices just a 24.4% probability of a 25 basis point cut in January 2026, compared to earlier expectations.

Trump Effect and Leadership Transition Uncertainty

President Trump’s recent statement about appointing a Federal Reserve chair who “believes in lower interest rates, by a lot” introduced fresh uncertainty. Such an appointment could compromise Fed independence and pressure the central bank toward easier policy—typically negative for the dollar’s long-term strength. However, this scenario remains speculative until officially announced.

Inflation Data on Tap

Investors will dissect the November US Consumer Price Index (CPI) release at 13:30 GMT on Thursday. Both headline and core inflation are expected to print at 3% annualized pace. This data will be critical in reassessing the Fed’s 2026 rate-cut trajectory and its implications for USD strength versus emerging market currencies like the INR.

Technical Picture: USD/INR Consolidates Above Key Support

From a technical standpoint, USD/INR trades at 90.7840, maintaining position above a rising 20-day exponential moving average (EMA) at 90.2106. The uptrend structure remains intact as long as the pair holds above this moving average band.

The Relative Strength Index (RSI) sits at 63.40, hovering in bullish territory after retreating from overbought conditions—a sign that momentum remains firm but not excessive. RSI gravitating higher within the mid-60s range favors trend continuation. A deeper pullback would only become concerning if RSI reversed sharply toward the 50 midpoint, signaling weakening impulse.

The daily technical setup suggests bulls retain control with dips expected to find support at the 20-day EMA. A decisive breakdown below this moving average would neutralize the bias and potentially trigger a deeper retracement toward lower support zones. For now, resistance remains near the recent 91.55 highs.

What Moves the Indian Rupee? Key Factors Explained

The Indian Rupee ranks among the most externally-sensitive currencies globally. Several macro variables exert outsized influence on INR valuations:

Energy Dependency & Oil Prices: India imports substantial crude oil, making the currency highly vulnerable to petroleum price swings. Rising oil costs increase import bills and pressure the rupee weaker.

US Dollar Dominance: Most international trade settles in USD, meaning the dollar’s broader strength or weakness creates direct headwinds or tailwinds for the rupee.

Foreign Investment Flows: FII and Foreign Direct Investment inflows strengthen demand for rupees, while outflows create supply pressure. Risk sentiment and perceived return opportunities drive these flows.

RBI Policy & Intervention: The Reserve Bank actively manages exchange rates to support trade facilitation. Interest rate adjustments—aimed at the RBI’s 4% inflation target—significantly influence rupee attractiveness. Higher rates typically strengthen the currency by attracting carry-trade capital seeking yield differentials.

Macroeconomic Fundamentals: GDP growth rates, inflation differential versus trading partners, balance of trade positions, and real interest rates (nominal rates minus inflation) all matter. Stronger growth attracts overseas capital. A less negative trade balance reduces rupee selling pressure. Real interest rates create incentives for foreign investors to allocate capital to India.

Risk Sentiment Cycles: A “risk-on” environment boosts FDI and FII inflows, benefiting the rupee. Conversely, risk-off episodes trigger capital flight and rupee weakness.

Higher inflation, particularly when exceeding peer nations, is generally currency-negative as it signals relative devaluation and erodes export competitiveness by inflating production costs. Paradoxically, higher inflation sometimes prompts RBI rate hikes, which can support the rupee through increased yield appeal.

The interplay of these factors determines whether the rupee appreciates or depreciates against the dollar, directly affecting conversions like 17 dollars in Indian rupees from day to day.