How RBI's currency operations are spiking forward premia across tenures

From about 3.5 per cent at the start of December to 6 per cent now, three-month forwards rates are most affected

Forward rates in the currency markets have risen sharply across tenures as the Reserve Bank of India (RBI) is understood to have increased its intervention in the future and forward segment.  

From about 3.5 per cent at the start of December to 6 per cent now, the three-month forwards rates are the most affected. Similar trends can be seen in 6-month and one-year forward points as well. Even the five-year segment has shown a jump. 

The rise in premium has happened because of two reasons, explains Samir Lodha, managing director and CEO of QuantArt Market, a treasury solution firm: With