ECONOMY
RBI partially relaxes restrictions on rupee derivative trades as currency volatility eases
- IBJ Bureau
- Apr 21, 2026
The Reserve Bank of India (RBI) has rolled back restrictions on certain types of rupee derivative trades.
On April 1, the RBI had clamped down on foreign exchange (forex) arbitrage trades that had exacerbated the rupee’s volatility.
As a part of the restrictions, the RBI had barred lenders from offering clients non-deliverable forwards (NDFs) and also barred users from rebooking cancelled forward contracts.
The central bank had also stopped authorised dealers from entering into any forex derivatives contract involving the rupee with their related parties.
The first two restrictions have now been withdrawn entirely. Besides, the central bank has tweaked restrictions on related-party deals to allow cancellation and rollover of existing contracts and transactions undertaken with a non-resident entity on a back-to-back basis.
The relaxations mark a partial rollback of crisis-era measures that the RBI had tapped to arrest the rupee’s slide to a record low past 95 in late March.
The initial restrictions had targeted arbitrage trades by placing a cap on banks’ net open rupee positions.
However, the curbs had failed to offer relief to the currency as banks exited positions by offering them to corporate entities and related parties.
The second round of restriction rolled out on April had helped spark a bounce of about 2 per cent in the South Asian currency, after which it has steadied in a 92.50-93.50 range over recent sessions.
Report By
View Reporter News