Foreign exchange derivatives market in a fix before new RBI rules

Average daily turnover may decline further; Rupee slips to fresh low vs Dollar

Exchange-traded currency derivatives volumes are likely to drop in view of new Reserve Bank of India (RBI) rules, casting a cloud over further participation of retail investors and proprietary traders. There are concerns that existing positions without any underlying exposure will need to be liquidated before Friday.

Also, weighed down by dollar demand from local oil companies and weakness in its Asian peers, the rupee on Wednesday ended at a new closing low of 83.44 versus the US currency.
 

The RBI issued a circular on January 5, 2024, effective from April 5, specifying that rupee-denominated currency contracts traded on the