Indian rupee surges 119 paise as RBI tightens foreign exchange controls. The currency opened at 93.62 per USD Monday, marking one of its strongest levels recently, after the Reserve Bank of India issued a directive capping banks' net open positions in the onshore forex market to $100 million. This intervention follows the rupee weakening approximately 4 percent since West Asia tensions escalated on February 28. The RBI's move forces authorized dealers holding long dollar positions to unwind these bets, reducing speculative pressure on the currency. Large private sector and foreign banks with significant trading desks face considerable impact, as their combined net open positions reportedly reach around $40 billion. Experts anticipate banks will reduce domestic deliverable positions while simultaneously cutting short positions in non-deliverable forward markets.
