RBI clamps down on rupee volatility with new forex and NDF curbs

RBI bans rupee NDF sales and forces positions to unwind

The Reserve Bank of India has tightened rules for foreign-exchange markets, targeting non-deliverable forwards to reduce sharp rupee swings. New directives cap banks’ net open foreign-exchange positions and stop them from offering rupee NDF contracts, requiring existing exposures to be unwound and preventing fresh ones. The goal is to limit arbitrage and offshore influence, supporting rupee stability.