Rupee Gains 10 Paise To 92.57 Against Dollar Ahead Of RBI Deadline

The Indian rupee opened 10 paise higher at 92.57 against the U.S. dollar on April 10, compared to its previous close of 92.66, as banks adjusted positions ahead of a regulatory deadline set by the Reserve Bank of India (RBI).

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RBI Deadline On Forex Positions

April 10 marks the final day for banks to comply with the RBI’s directive on foreign exchange exposure. On March 27, the central bank instructed that lenders must keep their net open positions in the rupee within $100 million at the end of each business day.

The move led banks to unwind arbitrage positions in offshore non-deliverable forward (NDF) markets. The RBI had not granted any extension to the deadline despite requests from some banks, resulting in continued position adjustments in the currency market.

RBI Governor Sanjay Malhotra, during a post-monetary policy briefing on April 8, stated that such measures were introduced to address heightened volatility in the foreign exchange market. He said these steps were not structural and would not remain in place permanently, indicating their temporary nature.

Crude Oil And Global Cues

International crude oil prices continued to play an important role in determining the exchange rates. The price of Brent crude stood at $97 per barrel on April 10, rebounding from previous falls amid uncertainties about the cessation of hostilities between the United States and Iran.

Oil prices have been seen to be rather volatile lately, due to fears over how sustainable the truce might prove, as well as possible consequences for oil transport through the strait of Hormuz. Ongoing geopolitical developments, including planned discussions between the U.S. and Iran, have kept market participants cautious, according to Reuters.

Market Context

Moves in the rupee are made within the backdrop of global and national developments impacting the foreign exchange market environment. Position unwinding by financial institutions, as well as measures taken by the RBI, have been instrumental in curbing volatility.

In addition, however, external influences like fluctuations in crude oil prices and geopolitical unrest have kept the rupee’s path with respect to the U.S. dollar in check. The currency was also under observation due to the expiry of the deadline set by the RBI.