RBI’s forced dollar unwind to keep rupee from sliding, bruise banks

Until Friday, banks could run net open positions of up to 25% of their net worth. In practice, large lenders often accumulated sizeable long dollar bets, sometimes in excess of of $1 billion, on expectations of rupee depreciation.

Key takeaways

Quick scan — what you need to know:

• Until Friday, banks could run net open positions of up to 25% of their net worth.
• In practice, large lenders often accumulated sizeable long dollar bets, sometimes in excess of of $1 billion, on expectations of rupee depreciation.
• The new cap forces a rapid reversal.
• By April 10, 2026, banks must cut these exposures to $100 million.

Background

What led here, in plain terms:

• This compels them to sell dollars and buy rupees to close the gap.
• Until Friday, banks could run net open positions of up to 25% of their net worth.
• In practice, large lenders often accumulated sizeable long dollar bets, sometimes in excess of of $1 billion, on expectations of rupee depreciation.
• The new cap forces a rapid reversal.

Why it matters

Why readers and decision-makers should care:

• In practice, large lenders often accumulated sizeable long dollar bets, sometimes in excess of of $1 billion, on expectations of rupee depreciation.
• The new cap forces a rapid reversal.
• By April 10, 2026, banks must cut these exposures to $100 million.