RBI asks banks to stop building offshore positions

FILE PHOTO: A man walks past the logo of Reserve Bank of India (RBI) inside its headquarters in Mumbai, India, August 5, 2022. REUTERS/Francis Mascarenhas/File Photo

MUMBAI: The Reserve Bank of India (RBI), seeking to arrest the rupee’s slide, is asking local banks to not build additional positions in the non-deliverable forward (NDF) market, a move that could lead to offshore volatility spilling into local markets, bankers and traders say.

The build-up of positions in this segment of the market is forcing the RBI to spend more reserves to defend the rupee, one of the bankers said.