RBI bars banks offering rupee NDFs to curb speculation
The Reserve Bank of India has just banned banks from offering or rebooking rupee non-deliverable forward (NDF) contracts, hoping to cool off speculation and give the struggling rupee some breathing room.
This move came as the rupee rose to 93.10 against the US dollar, marking its biggest single-day gain since September 2013.
Spreads widen as banks step back
Earlier, the RBI had already tried capping how much risk banks could take with the rupee.
Now, with this ban in place, trading patterns are shifting: spreads between local and overseas dollar-rupee deals have jumped as banks scramble to adjust.
The timing isn't random either; ongoing global uncertainty (especially around West Asia) is making things even trickier for India's currency.
For now, foreign players are set to play a bigger role in these markets while local banks step back.