USD/INR: RBI clampdown reshapes derivatives market – Commerzbank

FXStreet Insights Team FXStreet

Commerzbank analysts Dr. Henry Hao and Moses Lim note that the Reserve Bank of India (RBI) has banned authorised dealers from offering non-deliverable INR derivative contracts to residents and non-residents, and from transacting FX derivatives with related parties. The move aims to curb speculative pressure on the Rupee (INR). Offshore 1‑month USD/INR NDF fell 0.6% to 93.59 after the directive, easing near-term intervention needs.

Rupee regulation tightens as RBI targets speculation

"The Reserve Bank of India (RBI) banned authorised dealers from offering non-deliverable derivative contracts to both residents and non-residents yesterday. Dealers are also prohibited from offering any FX derivatives contracts with related parties. However, banks may offer deliverable forwards to clients for hedging purposes, as long as these banks refrain from offsetting the transaction through an offshore position."

"RBI's recent tightening of regulations on INR derivatives aims to curb speculative trades that have weakened the INR. In the near-term, this could alleviate pressure for the RBI to intervene to stablise the INR."

"However, it is unlikely to stem the currency’s decline in the medium-term as importer dollar demand is expected to remain firm amid elevated global commodity prices. RBI have drawn USD30bn from the FX reserve in the first three weeks of March to defend the INR."

"In FX, the onshore market was closed on Tuesday and Wednesday. The offshore 1-month USD-INR NDF fell 0.6% to 93.59 yesterday. It was stable at market open but sharply fell overnight following the RBI’s directive."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)

Author

FXStreet Insights Team

FXStreet

The FXStreet Insights Team is a group of journalists that handpicks selected market observations published by renowned experts. The content includes notes by commercial as well as additional insights by internal and external analysts.

AUD/USD bulls seem hesitant below 0.7050 ahead of RBA on Tuesday

AUD/USD reverses an Asian session dip on Monday as renewed optimism over Iran diplomacy boosts investor confidence, keeping a lid on the safe-haven US Dollar and supporting the risk-sensitive Aussie. Spot prices, however, remain below the one-month high, touched last Thursday, as bulls wait for the crucial RBA decision before taking fresh positions.

USD/JPY climbs to 158.00 neighborhood as BoJ uncertainty weighs on the JPY

The USD/JPY pair gains some positive traction at the start of a new week, recovering further from Friday's post-Bank of Japan (BoJ) swing low to sub-157.00 levels. The momentum lifts spot prices to the 158.00 neighborhood during the Asian session and seems unaffected by fresh intervention warning from Japan's Finance Minister Satsuki Katayama.

Gold trims intraday gains; trades below $3,900 as Fed hike bets counter weak USD

Gold trims part of its modest intraday gains, trading with a mild positive bias below the $3,900 mark during Monday’s early European session. The US Dollar attracts fresh sellers amid optimism over a potential diplomatic breakthrough to end the US-Iran war and offers some support to the commodity. Meanwhile, US Federal Reserve rate-hike bets remain firmly on the table amid energy-driven inflation concerns, keeping the non-yielding yellow metal near the October 2025 low touched on Friday.

Dogecoin risks deeper slide as whales diverge

Dogecoin hovers around $0.075 on Monday after falling for the fifth consecutive week since the end of September. Santiment data shows diverging whale activity, as large holders reduce their positions while smaller whale wallets accumulate tokens. Meanwhile, weakening on-chain metrics and a deteriorating technical outlook suggest that DOGE could remain vulnerable to further losses.

Middle East War updates: Iran warns of expanded strikes against US despite progress in talks

Here’s a brief recap of the key developments in the Middle East war that occurred over the weekend, which are expected to have a significant impact on markets in the upcoming week.

The 2% inflation target came from a throwaway remark. It now moves trillions

The Federal Reserve's 2% inflation goal grew out of an off-the-cuff remark by a New Zealand politician in 1988. Bond investors still price long-term US debt as if 2% holds, so a change in how the Fed measures inflation would move markets.