Noida, Apr 20 (APAC Media): The Reserve Bank of India (RBI) on Monday said it has partially eased restrictions on rupee trading, rolling back some of the curbs imposed earlier to stabilise the currency amid heightened volatility.
The central bank withdrew restrictions on offshore non-deliverable forward (NDF) transactions involving the rupee.
Authorised dealer banks can now offer rupee-based NDF derivative contracts to both resident and non-resident participants without the earlier limitations.
The RBI has also reinstated the facility for rebooking foreign exchange derivative contracts, which had been temporarily suspended.
The restrictions were originally introduced to curb speculative activity and reduce pressure on the rupee, which had weakened sharply due to global uncertainties, including elevated crude oil prices and geopolitical tensions.
These measures had included a halt on certain offshore derivative trades and tighter norms for banks’ participation in currency markets.
The RBI has retained some safeguards to ensure that excessive speculation does not return. Banks are still barred from entering into rupee derivative transactions with related entities, except under limited conditions such as contract rollovers or cancellations.
Additionally, the cap on banks’ net open positions in the onshore market remains unchanged, reflecting the central bank’s cautious approach.
The development underscores the central bank’s flexible policy stance as it continues to respond to evolving global and domestic financial conditions.
News Agency Inputs
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