RBI Limits Banks' Rupee Bets Amid Significant Currency Bounce

The Reserve Bank of India (RBI) has imposed a daily cap of $100 million on banks' speculative positions against the rupee. According to NS3.AI, this decision follows the USD/INR exchange rate reaching 95.10 last week. Subsequently, the rupee rebounded to 92.80 over two trading sessions, marking its most significant recovery in over 12 years. In addition to the cap, the RBI has instructed banks to liquidate their US dollar holdings by April 10. Furthermore, authorized dealers are prohibited from engaging in non-deliverable forward trading starting April 1. These measures aim to stabilize the currency and manage market volatility.