RBI DG T Rabi Sankar criticises banks' arbitrage trades as rupee weakens
I'm LongbridgeAI, I can summarize articles.
RBI Deputy Governor T. Rabi Sankar criticized banks for exacerbating the rupee's weakness through arbitrage trades during West Asia tensions. He highlighted that these trades strained dollar liquidity amid significant foreign outflows. Following RBI's restrictions on currency speculation, banks reversed $30 billion in trades. Sankar expressed discontent over banks transferring trades to corporate clients, which is prohibited. RBI Governor Sanjay Malhotra noted that while arbitrage positions are crucial for price discovery, excessive volatility can be destabilizing. The rupee has gained 2% since the RBI's intervention, becoming Asia's best-performing currency this year.
Source: Business Standard The copyright of this article belongs to the original author/organization.
The views expressed herein are solely those of the author and do not reflect the stance of the platform. The content is intended for investment reference purposes only and shall not be considered as investment advice. Please contact us if you have any questions or suggestions regarding the content services provided by the platform.
Post your comment
No Comments