RBI allows banks to trade in offshore rupee derivative market; move will help to contain volatility in domestic currency
5 years ago

RBI allows banks to trade in offshore rupee derivative market; move will help to contain volatility in domestic currency

Firstpost  

The Reserve Bank on Friday allowed banks to participate in offshore non-deliverable forward rupee markets with a view to contain volatility in the domestic currency Mumbai: The Reserve Bank on Friday allowed banks to participate in offshore non-deliverable forward rupee markets with a view to contain volatility in the domestic currency. “…the time is apposite to remove segmentation between the onshore and offshore markets and improve the efficiency of price discovery,” RBI Governor Shaktikanta Das said. Das said the benefits of allowing banks to participate in the NDF markets are “widely recognised” and the decision was taken after a consensus emerged within the RBI after examining all the aspects. The measures taken after consultations with the government include allowing Indian banks which operate from International Financial Services Centre Banking Units to participate in the NDF market, Das said.

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History of this topic

RBI announces steps to encourage cross-border transactions in Indian rupee
2 months, 1 week ago

RBI announces steps to encourage cross-border transactions in Indian rupee

The Hindu  

The Reserve Bank of India on Thursday announced liberalised norms to encourage use of Indian Rupee and local/national currencies to settle cross border transactions. The Reserve Bank has already signed Memorandum of Understanding with the central banks of the United Arab Emirates, Indonesia and Maldives to encourage cross-border transactions in local currencies, including Indian Rupee. "Overseas branches of Authorized Dealer …

RBI to continue interventions in forex market, despite tight liquidity
2 months, 1 week ago

RBI to continue interventions in forex market, despite tight liquidity

Live Mint  

Tight liquidity will not bind the Reserve Bank of India’s hands in intervening to curb excessive rupee volatility in the forex market, said a senior official aware of the thinking at the central bank. While liquidity management will not be a constraint for RBI to intervene in the forex market, bankers believe that the central bank will have to infuse …

India’s Central Bank dials down use of NDFs to fight Dollar
3 months, 1 week ago

India’s Central Bank dials down use of NDFs to fight Dollar

Live Mint  

India’s central bank has started to rein in its ballooning non-deliverable forwards book, according to people familiar with the matter, shifting away from one of its key tools to push back against the strong dollar. The Reserve Bank of India has recently let some short dollar positions in the overseas market expire without rolling into new contracts, the people said, …

RBI Permits Banking Units At IFSC To Settle NDDCs In Rupee
1 year, 9 months ago

RBI Permits Banking Units At IFSC To Settle NDDCs In Rupee

News 18  

The Reserve Bank on Tuesday permitted international banking units in GIFT City in Gujarat to settle non-deliverable foreign exchange derivative contracts in Indian rupee. As per the notification, Authorised Dealer Category-I banks operating IBUs can offer NDDCs involving the Indian rupee to resident non-retail users for hedging. Banks in India, which operate International Financial Services Centre Banking Units, were permitted …

RBI has allowed banks from 18 countries to trade in rupee: government in Rajya Sabha
2 years ago

RBI has allowed banks from 18 countries to trade in rupee: government in Rajya Sabha

The Hindu  

March 14, 2023 09:36 pm | Updated March 15, 2023 09:14 am IST - NEW DELHI Banks from 18 countries have been permitted by the Reserve Bank of India to open Special Vostro Rupee Accounts for settling payments in Indian rupees, the government told the Rajya Sabha on Tuesday. In response to a question from BJP’s Sushil Kumar Modi, Union …

RBI intervening in NDF market, monitoring rupee positions: Report
2 years, 5 months ago

RBI intervening in NDF market, monitoring rupee positions: Report

Live Mint  

The Reserve Bank of India has been selling dollars in the non-deliverable forward market via local banks based in India's GIFT City International Financial Services Centre, as it seeks to support the sliding rupee, traders said. The rupee has repeatedly hits record lows in recent sessions as the likelihood of more super-sized rate hikes from the U.S. Federal Reserve piles …

India’s big plan to bring rupee trading home is an uphill task
5 years, 4 months ago

India’s big plan to bring rupee trading home is an uphill task

Live Mint  

Mumbai: As London does more rupee trading than Mumbai, authorities in India are taking steps to get foreigners to transact onshore. NDF Market “It will be a better world for us if there is no NDF market, but we cannot wish it away,” former Reserve Bank of India chief Duvvuri Subbarao famously said during the US taper tantrum of 2013 …

To bringing rupee trading home, RBI takes steps to deepen markets
5 years, 5 months ago

To bringing rupee trading home, RBI takes steps to deepen markets

Live Mint  

India plans to allow foreign-exchange settled rupee derivatives trading in specially designated centers as it tries to deepen the local market. The non-delivarable forwards trading will take place in the International Financial Services Centres, the Reserve Bank of India said Friday. For instance, London has surpassed India’s financial capital Mumbai to become the top center for trading rupee, according to …

As London tops Mumbai in rupee trading, India looks to deepen local currency market
5 years, 6 months ago

As London tops Mumbai in rupee trading, India looks to deepen local currency market

Live Mint  

London has overtaken India’s financial capital Mumbai to become the top center for trading the nation’s currency. Trading in dollar-rupee offshore non-deliverable forwards increased threefold over the three-year period, the BIS report showed. Alive to the growing size of the offshore rupee market, India’s government and the central bank have been looking at ways to improve access for overseas investors …

India Inc is seeking dollar borrowings, but only select firms will find
5 years, 11 months ago

India Inc is seeking dollar borrowings, but only select firms will find

Live Mint  

Mumbai: Indian companies are lining up to seek dollar-denominated debt as global interest rates soften, but only a few are likely to find it as foreign investors remain wary about the credit quality of many, bankers say. Also making offshore debt attractive is that the Reserve Bank of India has eased external commercial borrowings guidelines, and started forward dollar-rupee swap …

RBI constitutes task force under Usha Thorat on offshore rupee markets
6 years, 1 month ago

RBI constitutes task force under Usha Thorat on offshore rupee markets

Live Mint  

The RBI Thursday announced a task force headed by its former deputy governor Usha Thorat to examine issues related to offshore rupee markets and recommend policy measures to ensure stability of the external value of the domestic currency. The eight-member task force will assess the causes behind the development of the offshore rupee market and study the effects of the …

A speculative attack on the rupee?
11 years, 7 months ago

A speculative attack on the rupee?

The Hindu  

The rupee that touched another record low at below 66-to-the-dollar, is on a downward slide the end of which none can see. Moreover, the Reserve Bank of India, which has been pointing fingers at the currency derivatives market as a speculative hub where the dollar rules higher, now argues that prices in those markets, or those driven by speculation, are …

Offshore markets influencing rupee movement: RBI
11 years, 7 months ago

Offshore markets influencing rupee movement: RBI

Firstpost  

The analysis says there is a long-term relationship between the spot and the NDF markets for the rupee. Mumbai: The non-deliverable forwards markets are exerting more pressure on onshore currency market, especially when rupee is under stress, the Reserve Bank said in its annual report quoting an internal research. “During the period of depreciation, shocks originating in NDF market may …

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