The Reserve Bank of India (RBI) has partially withdrawn restrictions on rupee derivative trading that were introduced earlier this month to contain sharp volatility in the currency market.
The earlier curbs were imposed after the rupee weakened to record lows against the US dollar. To reduce pressure, the RBI had restricted certain derivative transactions, including non-deliverable forward (NDF) contracts and rebooking of cancelled forward deals.
In its latest move, the central bank has allowed some of these transactions to resume, signalling that pressure on the rupee has eased.
However, the RBI has kept limits on banks’ net open currency positions, showing that it remains cautious about speculative activity.
Market experts say the easing will help companies and banks hedge foreign exchange risks more smoothly, especially importers and businesses with overseas exposure.
The rupee has recovered from recent lows and is now trading in a more stable range. Analysts believe the RBI is trying to balance currency stability with normal market functioning.
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