RBI opens up intervention avenue in offshore rupee derivative market

The central bank is tight-lipped on its intervention strategy, but it is suspected that it recently intervened in a huge amount in the offshore markets

The RBI has allowed Indian lenders to enter offshore rupee markets, “to improve efficiency of price discovery,” but in reality, this also gives a window to the central bank to enter these offshore markets in order to intervene and stamp out speculators influencing domestic exchange rates, even sitting a thousand miles away. RBI Governor Shaktikanta Das said even as banks are not participating in the rapidly growing non-deliverable forward (NDF) market, there are benefits of these markets.

The central bank is tight-lipped on its intervention strategy, but it is suspected that it recently intervened in a huge amount in the offshore