Rupee Declines 18 Paise to 93.31 Against Dollar Amid Partial Rollback of Offshore NDF Curbs

Rupee Opens Lower Amid RBI's Partial Roll-Back of Restrictions

The Indian rupee opened 18 paise lower on April 21, as traders digested the Reserve Bank of India's (RBI) partial roll-back of some of the most stringent restrictions it had imposed in the offshore non-deliverable forwards (NDF) market.

The rupee opened at 93.31 against the dollar after ending the previous session at 93.13. The RBI's move comes after the central bank issued a notification on April 20, withdrawing some of the restrictions imposed on forex dealers taking positions in the offshore non-deliverable forwards market (NDF) to curb rupee volatility.

The RBI had imposed restrictions on the offshore NDF market in late March to prevent excessive speculative trading. One of the key restrictions was that banks were required to maintain their net open position (NOP) on the rupee at $100 million at the end of each business day.

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Despite the restrictions, analysts from Finrex Treasury Advisors note that the buying syndrome continues in the market. This trend was evident after April 10, the day when banks had to unwind all positions of arbitrage that they had taken.

Globally, market participants are on standby as Brent crude remains choppy due to the ongoing two-week US-Iran ceasefire. The tension between the two sides has hardened, with both countries hardening their stance on peace talks. The United States and Iran have clashed over the Strait of Hormuz, which remains blocked, hitting fuel supplies.