According to four bankers, the Indian central bank has relaxed the informal limitations on rupee non-deliverable forward trades placed on local banks in October.
According to one banker with a private sector lender, “all banks are now back to building positions in this category.”
The bankers refused to be named since they are not allowed to speak to the media.
According to another trader at a private sector bank, the RBI now believes that banks exploiting any mispricing between the two markets represent no threat to the currency.
RBI has benefited from the dollar’s slide and the reasonably stable outlook, according to the dealer.
The dollar index is trading around 105, down 8.5% from the year’s highs.
The 2-year Treasury yield is 52 basis points lower than its peak. Following four consecutive raises of three-quarters of a percentage point, the Fed is projected to deliver a lower 50 basis point rate increase this week.
