RBI caps rupee exposure and blocks corporate NDF hedging

Banks face limits on positions and derivative usage

Change
India’s RBI capped banks’ net open rupee positions and barred corporates from using non-deliverable forwards.
Why it matters
The rules force banks to unwind exposures while eliminating a key offshore hedging channel for corporates.
Implications
  • Banks must reduce open positions — trading flexibility declines
  • Corporates lose NDF hedging — currency risk increases

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