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The rupee witnessed range-bound trade in the morning session on Friday (January 2, 2026), appreciating by 6 paise to ₹89.92 against the US dollar as thin liquidity conditions accentuated everyday demand-supply imbalances, keeping the rupee tilted toward weakness.
Forex traders said the USD/INR pair is expected to trade in a narrow range as the ₹90 level is being protected by the Reserve Bank of India (RBI).
Moreover, the support from positive domestic equities was offset by sustained foreign fund outflows.
At the interbank foreign exchange market, the rupee opened at ₹89.95 against the U.S. dollar, then gained some ground and touched ₹89.92, rising by six paise from its previous close.
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On Thursday (January 1, 2026), the rupee depreciated 10 paise to close at ₹89.98 against the U.S. dollar.
“Unless RBI comes and sells dollars heavily, the movement is going to be in small ranges as seen in the last three sessions. The pair is seen in a holding pattern between ₹89.80 and ₹90, considering the narrow range,” said Anil Kumar Bhansali, Head of Treasury and Executive Director at Finrex Treasury Advisors LLP.
Bhansali further noted that corporate demand, FPI demand, and government demand have been the salient features of the rupee over the past year, during which it fell by more than 5% and became the worst-performing Asian currency, though partly protected by the RBI.
Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, was trading marginally down by 0.15% at 98.17.
Brent crude, the global oil benchmark, was trading 0.38 per cent higher at $61.08 per barrel in futures trade.
“With early-year liquidity still thin and domestic fundamentals offering a mixed but stable backdrop, the rupee appears set to remain range-bound in the near term. As long as USD/INR stays below the 90 handle, the balance of risks tilts mildly in favour of the rupee,” CR Forex Advisors MD Amit Pabari said, adding that against this backdrop, USD/INR is expected to trade in a 89.30–90.20 range.
On the domestic equity market front, the 30-share benchmark index Sensex climbed 158.19 points to 85,346.79 in early trade, while the Nifty was up 55.8 points to 26,202.35.
Foreign institutional investors offloaded equities worth Rs 3,268.60 crore on Thursday, according to exchange data.
On the domestic macroeconomic front, gross GST collections rose 6.1% to over ₹1.74 lakh crore in December 2025, on slow growth in revenues from domestic sales following the sweeping tax cuts, according to government data released on Thursday (January 1, 2026).
Gross Goods and Services Tax (GST) revenue in December 2024 was over ₹1.64 lakh crore.
Published – January 02, 2026 10:02 am IST
