FOREX-Dollar dips after rally, but improved risk appetite curbs losses

They also sought cuts in key interest rates and banks' cash reserve ratio CRRin the customary meeting prior to the monetary policy review held by the central bank. Participants made a case for a gradual withdrawal of restrictions on forex derivative transactions.

These measures include imposing limits on banks' net overnight open positions, disallowing cancelling and re-booking of forward contracts, and restricting cross-settlements of over-the-counter deals on exchanges and vice versa.

RBI has also intervened heavily in the spot foreign exchange market to stem a downward trend in the rupee. Last month, the rupee fell to a record low of On Tuesday, it closed at The rupee has depreciated by 25 per cent against the greenback since August RBI Governor D Subbarao recently said the rupee depreciation was due to global as well as domestic factors.

Market participants also asked for further monetary easing, though discussions were limited in the backdrop of now-adequate liquidity conditions. A section of the market felt the central bank must maintain status quo, since the risk of a rebound in inflation was still high, the official added.

Call for breather on forex curbs | Business Standard News

Markets had factored in a rate cut on account of lower inflation numbers. Bond yields had fallen by around 10 basis points, as inflation eased from 7. However, yields hardened back to 8. In April, the central bank had unexpectedly cut the policy rate by 50bps.

In the mid-quarter review held in June, it had kept rates unchanged, citing upside risks to inflation.

RBI is scheduled to announce the first quarter review of monetary policy on July Today, the central bank consulted representatives from bond as well as foreign exchange markets. Money market participants on Tuesday asked for a do commodity brokers make money in the foreign exchange norms imposed by the Reserve Bank of India RBI in the wake of the sharp rupee depreciation.

In the past six months, the central bank had levied a number of restrictions in forwards, as well as currency futures transactions, to curb speculative trading. Upgrade To Premium Services. Business Standard is call for breather on forex curbs to inform you of the launch of "Business Standard Premium Services".

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Kindly click here to renew. Enter the characters shown in the image. Send me a copy: A TIMELINE OF RBI ACTIONS ON RUPEE. Banks' trading positions in currency futures reduced Counter-positions of exchanges and over-the-counter market restricted.