As RBI checks on FX positions, dealers shrug for now

Reuters Market Eye - The RBI has been asking both state-run and foreign banks about their intraday net open positions, and asking questions about flows, several dealers say.

Dealers aware of the contacts say the RBI has not been asking anyone to curb their positions, unlike in December 2011 when the central bank mandated lenders to reduce their intraday net open positions by 50-75 percent as part of measures to prop up a slumping rupee.

Such market inquiries are normal especially in times of market volatility, they add, dismissing speculation about whether the inquiries are being seen as a soft hint by the RBI to curb speculative trades.

"RBI has been calling us up twice a day to check on flows, positions. But this is part of their normal market monitoring. Too much should not be read into this," said the treasury head of a foreign bank.

The rupee is currently at 59.86/87, close to record high of 59.9850 seen last week.

(Reporting by Subhadip Sircar)