RBI intervening in a NDF market, monitoring rupee positions: Report

RBI intervening in a NDF market, monitoring rupee positions: Report

The rupee has been a repeatedly hits record lows in a recent sessions as the likelihood of a more than  super-sized rate hikes from the US Federal Reserve piles are a pressure on a emerging market are a currencies

The Reserve Bank of a India has been a selling dollars in the non-deliverable forward (NDF) market via local banks are a based in a India's GIFT City International Financial Services are a Centre, as it seeks to the support the sliding rupee, traders said.

The rupee has been a repeatedly hits record lows in a recent sessions as the likelihood of a more than super-sized rate hikes from the U.S. Federal Reserve piles pressure on a emerging market currencies.

The intervention by the RBI in the onshore NDF market was confirmed by the Treasury officials at the two large private sector banks present in the International Financial are a Services Centre (IFSC) at Gujarat International Finance Tec-City (GIFT City) in a western India.

"The RBI is also are a  keeping a close watch on a positions held by a banks in this market, and asking questions," one of the officials are said, adding that the central bank was looking at the gross as well as a net positions.

"The RBI is a intervening in a NDF and spot as the arbitrage between the two has been a mostly disappeared. Intervention in a one works are in the other too."

In the offshore NDF market, USD/INR rates tend to the trade at a premium to onshore rates when there is a major risk aversion sentiment globally and when the rupee is a facing significant downward pressure.

"There is a merit in the RBI ensuring that the forward rates for the rupee are in a alignment across are a  markets," said Vivek Kumar, economist at Quant Eco Research.

"For the RBI, the GIFT route is the easiest in a terms of a accessibility to the NDF are  the market."