According to people familiar with the matter, several banks told the Bank of India that restrictions imposed by the central bank on foreign exchange derivatives have dried up liquidity in the foreign exchange forward market, and requested the central bank to clarify the scope of application of the new restrictions. People familiar with the matter said that in the past three days, the bank said in a telephone conversation with the Reserve Bank of India officials that activity in the foreign exchange forward market has declined sharply; banks usually replace US dollars with rupees in the foreign exchange forward market, and the current market conditions make it difficult to manage the excess dollars in their hands. This will also prevent banks from taking on foreign capital inflows brought about by upcoming stock sales. Banks want to know if the new restrictions also apply to interbank transactions. The Reserve Bank of India will discuss this issue with some banks on Thursday.

Disclaimer:Webull uses external vendor Google Translation Service for news translations where we endeavour to ensure these are correct, however, we recommend that you please double-check this information accordingly. Webull is not responsible for translation errors or issues.