The Indian rupee saw a sharp rebound on April 2, rising 1.3% to 93.53 against the US dollar, after the Reserve Bank of India (RBI) introduced new measures to tighten control over the forex market.
The central bank’s latest steps focus on reducing speculative trading that had been putting pressure on the rupee. By restricting non-deliverable forward (NDF) trades and preventing companies from rebooking cancelled derivative contracts, the RBI effectively limited opportunities for traders to bet against the currency.
This triggered a rapid unwinding of existing dollar positions. As traders rushed to exit these bets, dollar supply increased while demand for the rupee improved, leading to the sharp appreciation.
The move comes after a period of weakness for the rupee, driven by rising oil prices, global uncertainty, and continued outflows by foreign investors. These factors had pushed the currency to record lows in recent sessions.
Also Read: OpenAI raises $122 billion for AI expansion