The Indian rupee rose in the non-deliverable forward market on Monday after the central bank tightened position limits on onshore exposures, a move bankers say will lead to the unwinding of arbitrage positions.
The 1-month dollar/rupee NDF was quoted at 94.70, according to bankers, down from 95.30 on Friday.
“It is highly illiquid right now, with bid-offer spreads quite wide,” a Singapore-based currency trader at a bank said.
“The market is not yet sure how the impact of these new limits will play out.”