India's Central Bank Tightens Forex Hedging Rules

The Reserve Bank of India has moved to tighten oversight of the country's foreign exchange market, financial news outlets MarketScreener and Finimize reported. According to the reports, the move makes currency hedging on the Indian rupee more expensive for financial institutions and investors.

Under the new regulatory steps, the central bank widened the scope of reserve requirements for forex risk while simultaneously tightening rules applicable to non-deliverable forwards (NDF).

Further details regarding the timeline for the measures taking effect and their full impact on the currency market have not yet been released.