India caps banks’ overnight dollar positions at $100 million with April 10 compliance deadline

The Hindu
Change
The Reserve Bank of India directed banks to cap overnight foreign-exchange positions at USD 100 million, with mandatory compliance by April 10, 2026.
India caps banks’ overnight dollar positions at $100 million with April 10 compliance deadline
Why it matters
The order imposes a hard limit on banks’ overnight dollar exposure, forcing immediate position adjustments and constraining short-term FX liquidity.
Implications
  • • FX trading desks at authorised dealer banks must reduce overnight USD positions to $100 million or below before the deadline — excess exposure will be non-compliant.
  • • Risk and treasury teams must actively manage intraday positioning and funding to stay within the cap — tighter limits may compress liquidity and increase short-term volatility.

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Source

The Hindu

Topics

Monetary Policy Financial Services

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