The RBI’s recent twin measures, capping net open position limits and tightening forex derivative rules to curb speculative pressure on the Rupee seems to be having the desired effect, with the Rupee now trading below the 94 to the Dollar mark. The Rupee is currently trading at 93.47 per US Dollar.
The Indian currency (INR) opened about 20 paise stronger at 94.6275 to the US Dollar/USD against previous all time closing low of 94.83 on March 30. The forex market was closed on the following two days – March 31 (Mahavir Jayanti) and April 1 (annual closing of accounts for Banks).
In intraday trades so far, the Rupee has tested a high/ low of 94.63/93.14 per USD, per CCIL data.
On March 27th (Friday), RBI capped banks’ Net Open Position – Indian Rupee in the onshore deliverable market to within US$ 100 million at the end of each business day.
The aforementioned measure initially strengthened the Rupee substantially below the 94 level.on March 30th (Monday) as Banks authorised to deal in foreign exchange were forced to unwind long Dollar positions in the domestic forex market.
However, INR reversed the gains, moving beyond the 95 mark, due to rising crude oil prices, strengthening Dollar, month-end importer demand and FPI-related outflows from the domestic equity markets amid the intensifying West Asia war.
Further, on April 1, the central Bank disallowed Banks from offering non-deliverable derivative contracts involving the Rupee (INR) to resident or non-resident users. It also stopped Authorised Dealers (ADs) from rebooking any foreign exchange (FX) derivative contract involving INR, whether deliverable or non-deliverable, which is cancelled with immediate effect.
Amit Pabari, MD, CR Forex Advisors, said: “Recognizing that underlying pressure hadn’t eased, the RBI moved beyond position limits and tightened forex derivative rules. The focus is now clear reduce speculation and bring the market back to genuine hedging activity.
“Banks are no longer allowed to offer non-deliverable INR derivatives to clients, and participants cannot maintain offsetting offshore positions. In addition, cancelled contracts cannot be rebooked, and dealings with related parties face tighter restrictions. Together, these measures significantly limit arbitrage opportunities.”
Pabari emphasised that RBI is narrowing the gap between offshore and onshore markets ensuring that price discovery happens in a more controlled and transparent environment.
Published on April 2, 2026