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Banks Wave Goodbye to Rupee Trades Before RBI Deadline

Banks Wave Goodbye to Rupee Trades Before RBI Deadline

Banks have waved goodbye to most of their rupee arbitrage trades to keep the currency from going on a wild ride. With a hefty $40 billion at stake, they decided to play it safe ahead of the RBI's deadline on April 10, leaving the rupee a tad weaker in the process.

Quick rundown

Banks exited Indian rupee arbitrage trades due to RBI limits.
RBI capped net open positions to curb market volatility.
Arbitrage trades were causing heightened FX market swings.
Estimated $40 billion in arbitrage positions were unwound.
Rupee weakened as banks completed position exits.

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