India FX forward premiums hit multi-month highs
India forward premiums reached multi-month highs as expectations for central bank sell-buy swaps grew to drain liquidity. This surge muddied market signals regarding the rupee direction and sparked anxiety among traders.
India's FX forward premiums extended post-policy gains to multi-month highs on Thursday amid expectations of central bank liquidity swaps. The one-year implied rate rose 12 bps to 3.95%, following a 36 bps surge on Wednesday. The aggressive move obscures underlying market signals regarding the rupee's trajectory.
