RBI relaxes some April 1 forex curbs on corporates and banks
April 20, 2026
The RBI has eased select forex curbs imposed earlier this month, restoring hedging flexibility for corporates and banks after curbing speculative bets against the rupee, even as broader restrictions remain amid continued pressure from elevated crude prices.
The RBI has eased select forex curbs imposed earlier this month, restoring hedging flexibility for corporates and banks after curbing speculative bets against the rupee, even as broader restrictions remain amid continued pressure from elevated crude prices.
By Latha Venkatesh
Reserve Bank of India has eased some of the foreign exchange market restrictions imposed on corporates and banks earlier this month, signalling a calibrated rollback of curbs introduced to contain speculative activity.
Under the revised framework, corporates are now allowed to rebook previously cancelled hedge contracts, a move that restores flexibility in managing currency risk. The restriction had been imposed through a circular issued on April 1.
In addition, banks have been permitted to offer quotes to corporates in the offshore market, also known as the non-deliverable forward (NDF) market, enabling companies to hedge their import and export exposures more effectively.
The rollback aligns with guidance from the RBI Governor earlier this month, indicating that the measures introduced on March 28 and April 1 were temporary and would be eased in a phased manner.
Also Read: Banks Urge RBI to Relax New Rules as $30 Billion Unwinding Looms
While the April 1 circular restricting hedging activities has now been withdrawn, the March 28 directive capping banks’ open derivative positions in the onshore market at $100 million remains in place.
Background: Speculative pressure on the rupee
Ever since the US imposed tariffs on India, global hedge funds have been increasingly betting against the rupee, building short positions on the currency. The trend intensified after March 1, when the Iran conflict and the closure of the Strait of Hormuz pushed oil prices from under $70 per barrel to around $120, raising concerns over India’s current account deficit and accelerating bearish bets on the rupee.
The RBI intervened heavily, selling nearly $60 billion in March, but the impact remained limited. The central bank is understood to have flagged that Indian banks were buying dollars sold by the RBI and taking offsetting short positions in the offshore non-deliverable forward (NDF) market, diluting the effectiveness of its intervention.
In response, the RBI moved on March 28 to curb speculative activity, directing banks to reduce their onshore open derivative positions to $100 million, with a deadline of April 10. Subsequently, it appeared that some positions were being passed on to corporate clients, prompting the April 1 circular that restricted both onshore and offshore derivative exposures for corporates.
With banks now having pared down their positions, the RBI has eased restrictions on corporates by withdrawing the April 1 directive. However, the $100 million cap on banks’ positions remains in place.
Foreign exchange dealers do not expect this cap to be lifted anytime soon, given persistent geopolitical risks and elevated crude oil prices, which continue to weigh on the rupee.
(Edited by : Sheersh Kapoor )
By Latha Venkatesh
Reserve Bank of India has eased some of the foreign exchange market restrictions imposed on corporates and banks earlier this month, signalling a calibrated rollback of curbs introduced to contain speculative activity.
Under the revised framework, corporates are now allowed to rebook previously cancelled hedge contracts, a move that restores flexibility in managing currency risk. The restriction had been imposed through a circular issued on April 1.
In addition, banks have been permitted to offer quotes to corporates in the offshore market, also known as the non-deliverable forward (NDF) market, enabling companies to hedge their import and export exposures more effectively.
The rollback aligns with guidance from the RBI Governor earlier this month, indicating that the measures introduced on March 28 and April 1 were temporary and would be eased in a phased manner.
Also Read: Banks Urge RBI to Relax New Rules as $30 Billion Unwinding Looms
While the April 1 circular restricting hedging activities has now been withdrawn, the March 28 directive capping banks’ open derivative positions in the onshore market at $100 million remains in place.
Background: Speculative pressure on the rupee
Ever since the US imposed tariffs on India, global hedge funds have been increasingly betting against the rupee, building short positions on the currency. The trend intensified after March 1, when the Iran conflict and the closure of the Strait of Hormuz pushed oil prices from under $70 per barrel to around $120, raising concerns over India’s current account deficit and accelerating bearish bets on the rupee.
The RBI intervened heavily, selling nearly $60 billion in March, but the impact remained limited. The central bank is understood to have flagged that Indian banks were buying dollars sold by the RBI and taking offsetting short positions in the offshore non-deliverable forward (NDF) market, diluting the effectiveness of its intervention.
In response, the RBI moved on March 28 to curb speculative activity, directing banks to reduce their onshore open derivative positions to $100 million, with a deadline of April 10. Subsequently, it appeared that some positions were being passed on to corporate clients, prompting the April 1 circular that restricted both onshore and offshore derivative exposures for corporates.
With banks now having pared down their positions, the RBI has eased restrictions on corporates by withdrawing the April 1 directive. However, the $100 million cap on banks’ positions remains in place.
Foreign exchange dealers do not expect this cap to be lifted anytime soon, given persistent geopolitical risks and elevated crude oil prices, which continue to weigh on the rupee.
(Edited by : Sheersh Kapoor )