Sa Ta
5 posts
Wild moves in USD INR exchange rate, after RBI's seat-of-the-pants rule making, creating heightened uncertainty for Indian rupee.
In just one day, rupee moved between 93.60-95.50 (almost a two-rupee movement) and closed at 94.4.
tradingeconomics.com/india/currency
x.com/WhyDan4/status…
A Sceptical Man@WhyDan4
Seat-of-the-pants rule making by RBI @RBI. RBI arbitrarily changing norms would lead to more uncertainty for rupee. NOP-INR position of Authorised Dealers (basically banks) rbi.org.in/Scripts/Notifi…
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Seat-of-the-pants rule making by RBI @RBI.
RBI arbitrarily changing norms would lead to more uncertainty for rupee.
NOP-INR position of Authorised Dealers (basically banks) rbi.org.in/Scripts/Notifi…
Latha Venkatesh@latha_venkatesh
Reactions to the RBI cap on open positions in the onshore forex mkt -Bankers shocked by this sudden cap imposition -Say total positons that need to be wound down could be $40 bn, probabaly more if one counts options -If difference between $-rupee rate in NDF mkt & onshore mkt on Monday rises to say Re 1, mark-to-mkt losses for banks would be $40bnxRe1= Rs4000cr. -This Rs4,000 cr is between foreign, pvt & PSU banks -Being year-end this loss may have to be booked in FY26 P&L -Bankers are hoping RBI will tweak rules a little by tomorrow morning: -Very optimistic ask: RBI grandfathers current open positions, says rule applies to fresh positions only -Moderately optimistic hope: RBI gives 3 months time to bring down open positions to $100mln -Less optimistic hope: RBI extends time to bring down open positions to April 30, i.e. 1 month -Pessimistic position: RBI doesn't budge
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*INR USD was At 95.58 at 3.30 pm and Now 94.426*
*Dramatically Up and dn Move*
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@tonitrades_ @ThetaVegaCap They have 2 weeks time but most banks would do it in the first week itself to avoid further penalties for non compliance or another reduction in cap to 50 million position.
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@ThetaVegaCap Interesting breakdown but aren't you assuming banks will unwind these positions all at once? Most treasuries hedge gradually to avoid moving the market against themselves.
The $200-400M selling pressure might spread over weeks, not days.
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RBI just changed the game for ₹ 👇
✅Banks’ USD/INR open positions capped at $100M
✅Earlier positions (in many cases) were $300M–$500M+
👉 Forced unwinding = $200M–$400M selling per bank
What happens next?
• Banks SELL USD → BUY INR
• Sudden supply of dollars in market
• ₹ gets short-term support / sharp appreciation
Simple math:
If 10 banks unwind even $250M each →
➡️ $2.5 BILLION USD selling pressure
That’s not small. That moves currency.
Why RBI did this:
👍Cut speculative USD bets
👍Reduce volatility
👍Control one-sided positioning
Impact:
• ₹ ↑ (short term)
• Exporters ⚠️
• Importers 👍
• Forex volatility 🔥
Bond market already hinted. Now RBI acted.
When liquidity shifts, currency moves first.
#RBI
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@TittyVinoo Is this a structural issue that has no end in years to come ?
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No matter what ever happens in the world #INR keep crashing 🫣🫣🫣🫣
Indian Rs is now 92.25 to a USD
#Israel
#Iran
#IndianRupee
#India
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