New Delhi: The Indian rupee recorded its sharpest single-day rise in more than 12 years on Thursday after authorities stepped up measures against currency speculation. The move included extending curbs to offshore derivatives markets, days after tightening limits on banks’ domestic positions, boosting confidence in the local currency.
The currency strengthened as much as 1.7 per cent to 93.25 against the dollar — its sharpest rise since September 2013 — as trading resumed after a three-day holiday break.
The rally came despite broad weakness across most regional currencies, as US President Donald Trump signalled a further escalation of tensions in West Asia.
On the commodities front, global crude prices surged. Brent crude futures traded at $106.47 per barrel, up 5.24 per cent, while US WTI futures rose 4.5 per cent to $104.64.
Asian stock markets also came under pressure, with major indices trading in negative territory. The Nikkei, Hang Seng, and KOSPI fell up to 3 per cent.
Domestic markets opened lower, with headline indices Sensex and Nifty falling up to 2 per cent in early trade.
The currency markets had remained closed since Monday, on account of Mahavir Jayanti on March 31, the start of the new fiscal year on April 1, and will shut on Good Friday on April 3.
The Reserve Bank of India has barred banks from offering rupee non-deliverable forwards to resident and non-resident clients. The central bank also said companies cannot rebook cancelled forward contracts.
Earlier in the week, the central bank also imposed a $100 million limit on banks’ net open rupee positions. It also prohibited banks from undertaking FX derivative contracts with related parties.
Moreover, India’s foreign exchange reserves, worth over $700 billion, are large enough to deter speculative moves and allow the RBI to intervene to stabilise the rupee, a report said.
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AI image/IANS
–IANS
