To curb wild swings and depreciation of the rupee, the RBI has tightened rules governing foreign exchange derivatives, barring Banks authorised to deal in foreign exchange from offering non-deliverable derivative contracts involving the rupee to resident or non-resident users.
It also stopped Authorised Dealers (ADs) from rebooking any foreign exchange (FX) derivative contract involving INR, whether deliverable or non-deliverable, which is cancelled with immediate effect.
RBI said ADs may, however, continue to offer deliverable FX derivative contracts to users to meet their hedging requirements, provided that the user does not undertake offsetting non-deliverable derivative positions. For this purpose, they may call for such information/documents from users as they deem necessary for complying with the requirements.
Further, ADs shall not undertake any FX derivative contract involving INR with their related parties. Under an FX derivative contract, two parties agree to buy or sell a specified amount of one currency for another at a predetermined rate on a future date or under specified conditions.
The aforementioned measures come on top of the RBI’s announcement late last Friday (March 27), asking Banks authorised to deal in foreign exchange to unwind long Dollar positions in the domestic forex market.
The Rupee saw wild swings on Monday (the last day of trading in FY26), moving a whopping 170 paise intraday, breaching the 95 level per Dollar for the first time before closing at a new low of 94.83.
Published on April 1, 2026
