Indian Rupee Gains After RBI Curbs Speculative Trading

The Indian rupee is expected to open significantly higher on Thursday following a series of aggressive measures by the Reserve Bank of India to curb speculative trading. The central bank's intervention includes barring banks from offering rupee non-deliverable forwards to both resident and non-resident clients and preventing companies from rebooking cancelled forward contracts. These steps aim to stabilize the currency after it hit an all-time low of 95.23 earlier this week. India has faced pressure from elevated oil prices and weak capital flows, prompting the regulator to limit banks' net open foreign-exchange positions. Market participants are also digesting recent geopolitical signals from the United States. President Donald Trump commented that strategic objectives in the conflict with Iran are nearing completion, though he warned of potential heavy strikes in the coming weeks. This uncertainty has pushed Brent Crude Oil prices up by nearly 5%, reaching $105.7 per barrel. While the rupee may see a short-term rally as traders unwind arbitrage positions, analysts at MUFG suggest the currency remains vulnerable if Middle East tensions continue to disrupt global trade routes. > Banks that had not yet cleared out arbitrage positions will be in a rush so the gap between onshore and offshore markets will expand further. Recent data from NSDL shows that foreign investors sold a net $419.1 million in Indian equities on March 30, while purchasing $98.1 million in bonds, highlighting the mixed sentiment currently prevailing in the market.