Overview
- The rupee rose roughly 1 percent after the central bank rolled out a package of steps over the weekend and sold dollars, producing the currency’s biggest one‑day gain in six months.
- The RBI introduced a special dollar window for state oil marketing firms to divert about $10–12 billion of monthly spot demand, imposed a 20% cash reserve on large dollar purchases above $2 million, and banned rebooking of cancelled FX derivative contracts.
- Regulators tightened rules for offshore rupee derivatives by limiting IFSC units to hedging for non‑residents and extended the cash‑reserve requirement to banks’ own hedges, measures that aim to make speculative positions more costly.
- Some banks have stopped quoting forward USD/INR rates because of confusion over the new cash‑margin rules, a development that has thinned forward liquidity and created short‑term market dislocations.
- Despite the rebound, high crude import bills and persistent foreign investor outflows keep downside risk elevated and officials including the finance minister said the RBI may widen or extend measures if rupee volatility continues.