Among traders the RBI's latest measures to target arbitrage and speculation is seen as akin to bringing a knife to a gunfight. The Reserve Bank of India announced new currency measures on Monday, including stipulating that net overnight open position limit for the rupee should not include positions taken in the currency futures and options segment.
The announcement had the same effect as its previous actions, which is to say not much. On Tuesday the rupee hit its latest record low against the dollar.
If anything, the RBI is signaling to markets the opposite of what it probably intends, according to traders: a central bank unwilling to be bold in defending the domestic currency.
"This won't affect the market much," said Abhishek Goenka, CEO of consultancy firm India Forex Advisors, adding it was "overall a very poor signal to the overall market that RBI is unable to take bold steps in the current market scenario."
The key problem behind Monday's measures, traders say, is that India's currency futures markets are not as liquid as spot or OTC forwards markets.
Traders did see more of a potential impact from the RBI's announcement that positions taken in futures and options cannot be netted out or offset by taking positions in the OTC market, or vice-versa.
Until the announcement, some dealers would bet in futures and options markets without an actual underlying position in the currency, and could offset these trades with the opposite position in the OTC market.
However, this practice was not widespread, limiting the impact of the measures.
"The arbitrage will be definitely be curbed, said Pramod Patil, a forex trader with United Overseas Bank, though he added the impact would be small.
"I see INR weakening only, thats the broad theme," he added.