Daijiworld Media Network - Mumbai

Mumbai, Dec 19: The rupee extended its recovery against the US dollar on Friday, strengthening past the psychologically crucial 90-mark to trade at 89.96 in early dealings. The domestic currency opened at 90.13 per dollar, gaining around 0.1 per cent from its previous close of 90.20.

The rebound comes after the rupee staged a tentative recovery from record lows earlier this week, when it had even slipped to the 91 level against the greenback.

Market participants attributed the sharp pullback largely to intervention by the Reserve Bank of India (RBI), which stepped in to sell dollars after the currency came under sustained pressure. Bankers said the central bank’s move was aimed at breaking the one-way depreciation trend in the market, prompting the unwinding of bearish positions.

Traders noted that the RBI’s strategy mirrored its actions during October and November, when it intervened repeatedly to counter persistent weakness in the rupee by selling dollars in both the spot and non-deliverable forward (NDF) markets.

Meanwhile, State Bank of India (SBI) has projected a stronger rebound in the rupee in the latter half of the next financial year. In its latest report, the country’s largest lender said it expects the recovery phase to unfold between October 2026 and March 2027.

SBI’s outlook is based on historical currency trends and internal analysis, which suggest that the current weakness in the rupee is cyclical rather than structural. The report pointed out that the rupee has witnessed several phases of depreciation and appreciation in the past and is likely to emerge from the present downtrend in the second half of the next fiscal year.