RBI restricts non-deliverable derivative contracts in rupee
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The Reserve Bank of India (RBI) has directed banks to stop engaging in non-deliverable derivative (NDD) contracts in the Indian rupee. This action aims to enhance regulatory oversight and stabilize the domestic currency market amid concerns over offshore speculation affecting rupee valuation.
The NDD market has grown due to capital account restrictions, allowing participants to hedge or speculate on exchange rate movements without direct currency access.
Not investment advice. For informational purposes only.