The Indian rupee treaded water on Thursday as jitters over the US-Iran ceasefire ran into the lingering impact of the central bank’s forex market curbs, which have sparked an unwinding of positions and made traders wary of speculative wagers.
The rupee has hovered in a 92.50-93.50 range over the last week after the central bank’s measures to curb excessive arbitrage positions were announced on March 27 and April 1.
It was at 92.65 per dollar, as of 10:30 a.m. IST, down modestly from its previous close. The measures have triggered chunky onshore dollar sales as banks rushed to unwind about $40 billion in arbitrage positions that had sought to profit from the gap between onshore and non-deliverable forwards.
“It seems like some bit of unwinding is occurring today as well. There is limited appetite to run a directional position on USD/INR at the moment, so the pair has become range-bound,” a trader at a state-run bank said. The central bank, in its monetary policy meeting on Wednesday, characterised recent measures as a response to the build-up of excessive arbitrage positions and said they would not remain in place indefinitely.
“We are somewhat less sanguine than RBI on this, and we do fear that there will be unintended long-term side effects from these FX measures; however, including questions around policy certainty and how that will ultimately spill over into capital inflows,” said Michael Wan, a senior currency analyst at MUFG.
Even as the rupee remained on a steady footing, Indian bonds dipped, and equities fell amid concerns that the Iran ceasefire may not fully restore oil supplies through the key Strait of Hormuz. Iran has said peace talks would be “unreasonable” following Israeli strikes in Lebanon. MSCI’s gauge of Asian stocks fell nearly 1 per cent while regional currencies were on the defensive as well.
Published on April 9, 2026