Rupee vs dollar check: Domestic currency appreciates 12 paise to 89.51 against US dollar in early trade

The rupee appreciated 12 paise to 89.51 against the US dollar in early trade on Wednesday, supported by the RBI's major liquidity announcement and the weakness of the American currency in the overseas market.

Forex traders said the rupee started the day on a stronger note after the RBI announced sufficient liquidity for the markets to the extent of approximately ₹3 lakh crore, which will also allow the RBI to keep rupee weakness under control.

At the interbank foreign exchange market, the rupee opened at 89.56 against the US dollar, then gained some ground and touched 89.51 against the US dollar, registering a gain of 12 paise over its previous close.

In the initial trade, it also touched 89.65 against the American currency. On Tuesday, the rupee settled at 89.63 against the US dollar.

According to Bhansali, the central bank has been actively managing the currency to curb excessive volatility and prevent USD/INR from breaching the 90 level and has also been buying dollars in the spot market to check sharp appreciation.

Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was trading 0.07% lower at 97.87.

Brent crude, the global oil benchmark, was trading higher by 0.02% at $62.39 per barrel in futures trade.

The Reserve Bank of India on Tuesday said it will purchase government securities worth ₹2 lakh crore and conduct a $10 billion buy/sell dollar-rupee swap auction to inject liquidity into the banking system.

The latest announcement comes days after the RBI conducted ₹1 lakh crore OMO purchase auctions of Government of India securities and a USD/INR buy/sell swap auction of $5 billion for a tenor of three years.

Stock market on Wednesday

The Indian stock market opened with marginal gains on Wednesday, December 24, mirroring its Asian peers and gains in realty and media stocks.

IT stocks tumbled after the Trump administration announced it would replace the random lottery system for the H-1B visa process with a merit-based mechanism that prioritises higher-skilled and higher-paid applicants.

According to exchange data, on Tuesday, the foreign institutional investors (FIIs) sold shares worth ₹1,794.80 crore, while the domestic institutional investors (DIIs) bought equities worth ₹3,812.37 crore on a net basis.