New FX curbs sow confusion, bankers await clarity on dealing rupee derivatives

Bankers are interpreting the new foreign-exchange regulations in India broadly, especially regarding cash-margin requirements related to rupee forwards. This cautious approach has made them reluctant to quote dollar/rupee forwards, raising concerns about its impact on interbank transactions. Interestingly, a source mentioned these new requirements do not affect interbank activity. Meanwhile, the central bank has not responded to queries for clarification, highlighting continuing uncertainty in India's foreign-exchange landscape.