02.04.2026 06:54

The Reserve Bank of India’s latest regulatory tightening is already reshaping the derivatives landscape, according to analysts Dr. Henry Hao and Moses Lim of Commerzbank. Their assessment, drawn from recent internet sources, highlights a sweeping ban on authorised dealers offering non‑deliverable INR derivative contracts to both residents and non‑residents, as well as a prohibition on FX derivative transactions with related parties.

Under the new rules, banks retain the ability to provide deliverable forwards for hedging purposes, provided they do not offset these positions through offshore channels. This selective allowance underscores the RBI’s focus on curbing speculative activity while preserving legitimate hedging needs for corporate clients.

The central bank’s move is intended to reduce speculative pressure that has been eroding the rupee’s value. By limiting the availability of non‑deliverable contracts, the RBI hopes to lessen the need for immediate market intervention, potentially stabilising the currency in the short term.

However, analysts caution that the rupee’s medium‑term trajectory may still be downward. Persistent dollar demand from importers, coupled with elevated global commodity prices, is expected to keep pressure on the INR. In response, the RBI has already withdrawn approximately USD 30 billion from its foreign‑exchange reserves during the first three weeks of March to defend the currency.

The impact of the directive was evident in market movements: the onshore market closed on both Tuesday and Wednesday, while the offshore 1‑month USD/INR NDF slipped 0.6% to 93.59 following the announcement. The rate remained stable at market open but experienced a sharp overnight decline after the RBI’s directive.

This article was generated with the assistance of an artificial intelligence tool and subsequently reviewed by an editor. Source: https://www.fxstreet.com/news/usd-inr-rbi-clampdown-reshapes-derivatives-market-commerzbank-202604020615