RBI bars banks from offering nondeliverable rupee derivatives, blocks rebooking
The Reserve Bank of India just rolled out stricter rules for foreign exchange derivatives, hoping to calm the rupee's wild swings.
Banks authorized to deal in foreign exchange can no longer offer nondeliverable rupee derivative contracts (basically, bets on the rupee's future value) to anyone, whether you live in India or not.
Plus, if a rupee FX contract gets canceled, it cannot be rebooked anymore.
Banks allowed deliverable hedges with restrictions
Banks and authorized dealers can still help you hedge with deliverable contracts, but only if you do not already have offsetting nondeliverable positions.
They are also barred from making these deals with related parties.
This all comes after the RBI's late March directive for banks authorized to deal in foreign exchange to unwind big dollar bets when the market got shaky and the rupee briefly crossed 95 per US dollar.
The goal: less speculation and more stability for India's currency.