India Trading Ban Rocks $149 Billion-a-Day Offshore Rupee Market

India banned its banks from offering the most popular instrument for trading the rupee offshore, threatening to squeeze a $149 billion-a-day market in an extreme step to shore up its tumbling currency.

The Reserve Bank of India’s restrictions on non-deliverable derivative contracts will ripple through major currency hubs such as Singapore and London, where trading has exploded over the past decade to about twice the size of the onshore market. The rupee surged the most in 12 years on Thursday.