Forex trade drops as banks run tight positions

Trading volumes in the local currency markets have declined in the recent days because most banks are preferring to keep positions light amid uncertainty over stock market moves, RBI’s actions, and dollar volatility globally.

Foreign banks, who are usually big players, have also cut down their positions as they close their books of accounts in December. “As we are approaching the year-end, most banks are staying away from taking any fresh positions,” said Madhusudan Somani, head of foreign exchange trading, YES Bank.

“ As the year-end closing date is approaching, most of them prefer to be on the sidelines if they have met their targets and be happy with whatever money they have made,” said a dealer with a European bank.