RBI cracks down on forex speculative trading

Mumbai, July 02 –  Concerned about the rupee's fall to a record low, the Reserve Bank has discreetly phoned trading desks with unusually explicit messages to cut their speculative positions in the currency, said three senior market participants with direct knowledge of such calls.

While the Reserve Bank of India (RBI) regularly monitors positions and flows in the currency market, the sources said it was unusual for the RBI to call so often or state so explicitly that banks should cut their intraday net open position limits – or their outstanding positions in futures and forwards markets.

A bank's net open position is its aggregate exposure to foreign exchange risk.

Source:Reuters