Millennium Post

RBI curbs currency Futures & Options trading by banks

Seeking to arrest the declining value of rupee, the Reserve Bank of India (RBI) has imposed restriction on banks with regard to trading in currency futures and options (F&O) with immediate effect.
Under the new norms, the banks have been barred from trading in currency futures and exchange traded currency options market on their own. They will, however, be allowed to trade on behalf of their clients.

‘On a review of the evolving market conditions, it has been decided that... banks should not carry out any proprietary trading in the currency futures/exchange traded currency options markets. ‘In other words, any transaction by... banks in these markets will have to be necessarily on behalf of their clients,’ an RBI said in a late night notification on Monday. It would come into effect immediately, RBI added.
The RBI and the government have been taking steps to arrest the fall in rupee.

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