India's rupee is set to gain sharply after the RBI's new anti-speculation measures, but forex dealers warn of a looming market freeze. The 20% Foreign Exchange Risk Reserve forces banks to lock up interest-free cash, choking interbank liquidity and making corporate hedging uneconomical. Oil companies will source dollars via a special RBI window, while stricter documentation slows other purchases.
RBI Measures to Lift Rupee but May Freeze Forex Market
Source: Times of India