Indian Rupee Strengthens Amid RBI Market Action—What It Means for Ethereum Price INR Today

The Indian Rupee has staged a notable recovery against the US Dollar as the Reserve Bank of India steps in to stabilize the exchange rate. The USD/INR pair retreated by more than 1% to hover near the 90.00 level, down from its recent peak of 91.56. State-run banking institutions were observed actively supplying US Dollars to the market, signaling central bank support for the domestic currency. This intervention comes as the INR has struggled throughout 2024, depreciating approximately 6.45% year-to-date and emerging as the weakest performing currency across Asia.

Why the RBI Is Acting Now: The Rupee Under Pressure

Several headwinds have weighed on the Indian Rupee’s performance. A prolonged absence of trade negotiations between India and the United States has triggered consistent capital outflows, with Foreign Institutional Investors (FIIs) net sellers in seven of the first eleven months this year. December alone witnessed FII redemptions valued at Rs. 23,455.75 crore from the Indian equity market.

The stalled US-India trade talks have simultaneously boosted demand for US Dollars among Indian importers seeking to secure foreign exchange, further pressuring the Rupee’s value. RBI Governor Sanjay Malhotra addressed these concerns in recent remarks to the Financial Times, indicating that interest rates will “remain accommodative for an extended horizon.” The Governor also flagged recent GDP figures as “unexpectedly strong,” prompting the central bank to recalibrate its forecasting models. Most significantly, Malhotra estimated that a potential US-India trade agreement could add as much as 0.5% to overall GDP growth.

US Dollar Rebounds on Mixed Economic Signals

Meanwhile, the US Dollar Index (DXY) has reclaimed 0.17% to trade near 98.40, recovering from an eight-week trough close to 98.00 set the previous session. This rebound reflects competing signals from American economic data released on Wednesday. Employment figures for October and November combined revealed that joblessness climbed to 4.6%, the highest since September 2021, while the economy shed 105,000 positions in October before adding 64,000 in November.

Separately, October Retail Sales printed flat month-on-month against forecasts for 0.1% growth. December’s flash Composite PMI arrived at 53.0, substantially below November’s 53.2 reading, signaling moderating private sector momentum. Yet market participants contend that the government closure distorted these metrics and are unlikely to reshape Federal Reserve expectations. The CME FedWatch tool currently assigns minimal probability to Fed rate cuts in January 2026.

Investors are now eyeing the November Consumer Price Index release, scheduled for Thursday, as the next critical catalyst for USD direction.

Understanding Currency Drivers: The Rupee’s External Dependencies

The Indian Rupee remains exceptionally sensitive to global macroeconomic conditions. Oil import dependency, the strength of the US Dollar—which facilitates the majority of international trade—and foreign investment appetite all exert substantial influence. Beyond market mechanics, RBI direct intervention in currency markets and its interest rate policy framework represent the primary domestic policy levers.

Higher interest rates typically strengthen the Rupee by attracting capital through the carry trade mechanism, where global investors borrow at lower rates and deploy capital in higher-yielding markets to capture rate differentials. Macroeconomic indicators including inflation, GDP growth, trade balances, and foreign investment flows shape the Rupee’s medium-term trajectory. A robust growth rate encourages overseas capital deployment, increasing Rupee demand, while a narrower trade deficit eventually supports currency appreciation.

Inflation dynamics present a dual effect: elevated price pressures weaken the currency through increased import demand but can trigger RBI rate hikes that offset this depreciation through stronger investment flows. In a risk-on environment, both Foreign Direct Investment (FDI) and Foreign Indirect Investment (FII) accelerate, bolstering the Rupee. This interconnected framework explains why tracking Ethereum price INR today and other asset valuations requires monitoring both USD strength and Reserve Bank policy decisions simultaneously.

Technical Positioning: USD/INR Consolidates Above Key Support

On the daily timeframe, USD/INR trades at 90.5370, holding above the ascending 20-day Exponential Moving Average (EMA) positioned at 90.1278. This technical structure preserves a constructive bias. The Relative Strength Index stands at 59.23, just above the 50 neutral mark, confirming positive momentum following a pullback from overbought extremes in the 70s.

Initial support materializes at the 20-EMA level of 90.1278. So long as the pair maintains bids above this guardrail, the upside remains favored. A more substantial support zone spans 89.9556–89.8364 across the moving average cluster. A daily close beneath this area would signal consolidation conditions, whereas sustained support would open the door for further appreciation. Current trend structure remains constructive, though moderating momentum suggests the rally may pause for consolidation ahead of further directional clarity.