RBI forex curbs create rare rupee arbitrage but bankers cautious
Business
The RBI's new foreign-exchange restrictions have created a rare chance to profit from the price gap between rupee futures and onshore forwards.
But bankers aren't jumping in: regulatory risks and keeping away as they nurse losses on arbitrage trades have made them extra cautious.
Rupee forwards volatile as banks unwind
These RBI moves have caused some market turbulence, with sudden spikes in swap rates and unpredictable daily pricing.
While spot rates are steady, forward premiums are all over the place as state-run banks unwind trades.
The central bank is working hard to keep the rupee stable, so for now, banks are focused on managing risk instead of chasing quick wins.