The Reserve Bank of India’s (RBI) directive to users of exchange-traded currency derivatives to comply with the need for underlying exposures has nipped a flourishing arena of speculation in the bud. It has also brought to the fore the central bank’s scrutiny of potential triggers of exchange rate fluctuation. On April 4, the RBI quelled speculation about the status of mandatory underlying contracts, while providing an additional month – till
Opinion
Why the RBI is closely watching currency derivatives trading
Synopsis
India’s central bank has conveyed in no uncertain terms that it will closely scrutinise what it reckons is a trigger for exchange rate fluctuation – derivates trading.
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