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March 30, 2026 at 4:15 AM IST
The Indian rupee staged a sharp recovery today after the Reserve Bank of India tightened rules on banks’ foreign-exchange exposure, triggering a rush to unwind dollar-long trades that had built up in recent weeks.
The domestic currency rose nearly 1% to around 93.89 per dollar in early trade, rebounding strongly from a record low of 94.85 hit on Friday. The bounce followed the RBI’s late-Friday directive asking banks to cap their net open rupee positions in the forex market at $100 million by the end of each business day, with full compliance required by April 10.
Market participants said the move could lead to substantial onshore dollar selling as traders cut arbitrage and speculative positions. Banks had accumulated large dollar-long bets amid heightened geopolitical tensions in West Asia, which had pushed the rupee down more than 4% since late February. By forcing banks to reduce these exposures, the central bank has effectively triggered a technical reversal in the currency.
“As rupee was continuously falling RBI may have taken this step to control the fall in the rupee which is to be done by the Banks till 10th of April,” said Anil Kumar Bhansali, head of treasury at Finrex Treasury Advisors LLP.
“Banks have requested RBI to extend this date as they have positions worth $ 40-50 billion which they may not be able to square up immediately to which till now there is no response from RBI,” he said.
This marks the first time since 2011 that the RBI has explicitly imposed a limit on net open positions--a metric typically determined internally by bank boards.
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