Read an article Bank stocks drop up to 4% after RBI intensifies crackdown on rupee speculation from moneycontrol
ref : Bank stocks drop up to 4% after RBI intensifies crackdown on rupee speculation; AU SFB, BoB lead losses
Actually what does this mean , are these bank selling F&O to corporate or company directly without using the NSE OR BSE OR MCX?
Mostly they took positions themselves offshore.
Can you please explain bit more , I am not able to understand the strategy they are using…
It is Rupee F&O, but it’s outside the country in “non deliverable” contracts, which means actual rupee or dollar is never exchanged, but at expiry, the difference between exchange rates are settled in cash. Banks take these positions as a hedge or for income. RBI limited the positions to 100M last time… Now they seem to be blocking all Fx derivatives.
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