Industry Odisha Bureau, March 28: As the value of Indian rupee (INR) is on its depreciation spree against the value of dollar (USD) in the global markets and the Middle East conflict has further added fuel to the fire, the Reserve Bank of India (RBI) has now woken up to the occasion in a bid to daunt/discourage iffy/speculative trading in currency markets.
As per media reports, such a move by the RBI is aimed at discouraging speculative trading in currency markets, and more measures by the RBI are expected keeping in view the depreciation spree of INR.
Media reports quoted here state: “The Reserve Bank of India said late Friday that lenders acting as authorized dealers in the rupee must ensure their open positions in the onshore currency market do not exceed $100 million at the end of each trading day. Banks must comply by April 10, the regulator said, adding that such limits may be set depending on market conditions.”
Media reports further claimed, “RBI’s defense of the currency has sharply reduced its foreign-exchange (Forex) reserves, potentially limiting its ability to intervene aggressively as India’s Forex reserves have dropped more than $30 billion in the first three of March.”
Notably, INR reportedly dropped 94.86 versus USD yesterday (Friday, March 27) for the first time weakening almost 1%. This decline is claimed to be more than 4% since the Middle East/West Asia conflict broke out on February 28 this year “making it Asia’s worst-performing currency so far”.
