RBI asks banks to stop building positions in offshore market: Report

The Reserve Bank of India, seeking to arrest the rupee's slide, is asking local banks to not build additional positions in the non-deliverable forward market, a move that could lead to offshore volatility spilling into local markets, bankers and traders said.

The build-up of positions in this segment of the market is forcing the RBI to spend more reserves to defend the rupee, one of the bankers said.

The RBI's informal communication to local bankers is a step back from the directions it issued in June 2020, when it allowed banks operating from the International Financial Services Centre