Rupee Biggest Single Day Gain as RBI Tightens Curbs
The Indian rupee posted its biggest single day gain in more than 12 years on Thursday as authorities intensified their crackdown on currency speculation by extending curbs to offshore derivatives markets.
The currency strengthened as much as 1.7 per cent to 93.25 against the dollar — its sharpest rise since September 2013 — as trading resumed after a three-day holiday break, marking a notable rupee biggest single day gain in recent years.
Rupee Strengthens Despite Global Market Pressure
The rally came despite broad weakness across most regional currencies, as US President Donald Trump signalled a further escalation of tensions in West Asia.
On the commodities front, global crude prices surged. Brent crude futures traded at $106.47 per barrel, while US WTI futures also rose sharply.
Asian stock markets came under pressure, with major indices trading in negative territory. The Nikkei, Hang Seng, and KOSPI fell up to 3 per cent.
Domestic markets also opened lower, with Sensex and Nifty falling up to 2 per cent in early trade.
RBI Measures Behind the Sharp Rupee Rally
The currency markets had remained closed since Monday due to multiple holidays.
The Reserve Bank of India has barred banks from offering rupee non-deliverable forwards to resident and non-resident clients. The central bank also said companies cannot rebook cancelled forward contracts.
Earlier in the week, the central bank also put a limit of $100 million on net open rupee positions of banks. It also prohibited banks from undertaking FX derivative contracts with related parties.
Impact on Markets and Forex Reserves
Moreover, India’s foreign exchange reserves of over $700 billion are large enough to deter speculative moves and allow the RBI to intervene to stabilise the rupee, a report said.
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