Branch2 Intelligence
Rupee's defence takes RBI dollar shorts to a record high
Key takeaway
RBI's net short forward position hit a record $106.6bn in May, signalling heavy intervention to defend the rupee.
- Step 11st-order: RBI sells dollars forward to defend the rupee, net short forward position hits record $106.6bn.
- Step 22nd-order: Rupee liquidity tightens, pushing up Indian short-term rates and raising borrowing costs for Indian corporates.
- Step 33rd-order: UK SMEs with Indian supply chains face higher hedging costs and potential payment delays as rupee volatility persists.
Source: Economic Times (Markets)
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