A sharp regulatory intervention targeting speculative forex activity has disrupted nearly $5 billion in SBI rupee bets, significantly impacting positions held by the bank. The move follows tighter RBI currency rules introduced by to curb volatility and stabilize the rupee.

Key Highlights

• SBI rupee bets worth $5 billion disrupted as RBI currency rules force banks to unwind positions.
• SBI estimates Rs 300 crore losses from unwinding trades amid stricter RBI currency rules targeting forex speculation.

According to reports, these bets accounted for around 20% of SBI’s total exposure, with the bank estimating losses of about Rs 300 crore ($32 million) after being forced to unwind trades. Despite the impact, the losses are seen as manageable given SBI’s asset base exceeding $800 billion, even as the new RBI currency rules continue to reshape India’s forex market dynamics.

The action comes as the RBI intensifies efforts to stabilize the rupee, which has declined over 3% this year amid foreign capital outflows and rising crude oil prices widening India’s trade deficit.

Also Read: RBI Introduces Fresh Measures to Stabilize the Indian Rupee

As part of its measures, the RBI has directed banks to cap daily open positions in the onshore currency market at $100 million by April 10. Market participants believe the exit of such large positions by SBI and other institutions could support short-term strengthening of the rupee.

The broader exposure in similar currency bets across the market is estimated to be at least $30 billion, highlighting the scale of speculative positioning in the forex segment. Analysts note that tighter regulatory oversight is likely to curb excessive risk-taking while ensuring greater stability in India’s currency markets, though it may also lead to near-term volatility as positions are unwound.