RBI Cracks Down on FX Arbitrage as Rupee Plumbs New Lows: Q&A

The Reserve Bank of India has asked banks in India to cap their net open positions in the onshore currency market at $100 million per day, effectively taking away their ability to make large bets against the rupee and forcing them to unwind existing positions.

The dramatic step comes as the rupee slides to record lows, pressured by elevated oil prices and capital outflows linked to the Middle East conflict.