RBI committed to single global dollar-rupee market, says DG Sankar

‘Restrictions were a temp measure’

Speaking on the sidelines of an event organised by the Clearing Corporation of India (CCIL) to mark its 25th anniversary, Sankar said, “All that was done (including the $100 million limit for participants in the non-deliverable forwards (NDF) market and other stringent measures) was to address a temporary event that created large volatility. Once that is taken care of, we should be back on track.”

The central bank on Monday partially rolled back some of the restrictions imposed on trades in the offshore NDF market. In a notification, it withdrew an earlier circular that had barred banks from offering certain derivative contracts to resident and non-resident users. Banks are now also permitted to rebook or cancel such contracts with immediate effect.

“It was a temporary measure. It had to be rolled back at some point,” Sankar explained.

He added that the RBI would intervene only in the event of excessive and disruptive volatility. When asked what it would take to lift the $100 million cap on open positions, he said, “We will see when it comes to that.”

On criticism from market participants regarding the discussion paper on safeguards for digital payments, Sankar clarified that no final decisions have been made. “None of this is policy yet. We will review the feedback and take a call accordingly,” he said.

Addressing the event, Sankar noted that initiatives such as enabling foreign currency settlement at GIFT IFSC mark an important, though early, step for CCIL. “It’s a small beginning, but as IFSC business gathers momentum, this will become more significant,” he said.

Looking ahead, he expressed hope that over the next 25 years, CCIL will build a meaningful global presence and gain recognition among international market participants as a significant institution.