The Reserve Bank of India on Monday ​rolled back restrictions on certain types of rupee derivative trades, ‌which it had initiated earlier in April to arrest ​the currency’s slide to successive record ⁠lows.

As part of its clamp-down on arbitrage trades that had exacerbated the rupee’s volatility, the central bank on April 1 barred lenders ‌from offering clients non-deliverable forwards and also barred users from rebooking cancelled forward contracts.

The central bank had ‌also stopped authorised dealers from entering into any ‌FX ⁠derivative contract involving INR with their related parties.

While ⁠the first two instructions have been withdrawn entirely, the central bank has tweaked restrictions on related party deals to allow cancellation and rollover of ​existing contracts and transactions undertaken ‌with a non-resident entity on a back-to-back basis.

The relaxations mark a partial rollback of crisis-era measures that the RBI tapped to arrest the rupee’s slide to a record ‌low past 95 in late March.

The initial ​restrictions had targeted arbitrage trades by placing a cap on banks’ net open rupee positions. However, ⁠the curbs failed to offer relief to the currency as banks exited positions by offering them to corporates and ‌related parties, Reuters had reported.

The second round of restrictions — rolled out on April 1 — helped spark a bounce of about 2% in the currency, after which it has steadied in a 92.50-93.50 range over recent sessions.

The limit on banks’ net open rupee positions in the onshore market at $100 ‌million, though, remains in place.

“The rollback suggests the RBI wanted ​to restore normal hedging activity while continuing to curb speculative trades which made the currency vulnerable,” an ⁠FX trader with a private bank said.

The relaxation also follows ⁠scrutiny of such corporate and related-party transactions on concerns that they skirted regulations and impeded efforts to ‌shore up the currency.

India’s curbs on banks’ foreign-exchange positions will not remain in place indefinitely, central bank ​chief Sanjay Malhotra said earlier in the month.

Published on April 20, 2026