Reserve Bank of India (RBI) has cracked the whip on some of the large foreign banks in the country for encouraging companies to participate in speculative trades in the foreign exchange market. RBI in a meeting
with senior representatives of foreign lenders have cautioned them for taking part in such trades, as it felt these transactions were partly responsible for sharp depreciation in the rupee against the dollar. Foreign banks were acting as arrangers for the companies in these transactions.
Most of these speculative trades were done taking advantage of the difference in forward premium rates in India and non-deliverable forward ( NDF) contract market abroad.
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with senior representatives of foreign lenders have cautioned them for taking part in such trades, as it felt these transactions were partly responsible for sharp depreciation in the rupee against the dollar. Foreign banks were acting as arrangers for the companies in these transactions.
Most of these speculative trades were done taking advantage of the difference in forward premium rates in India and non-deliverable forward ( NDF) contract market abroad.
....more info