India’s RBI Tightens Rules on Rupee Derivatives, Raises Cash Reserve Requirement

India's central bank tightens rupee derivative rules and raises cash reserve requirement to stabilize currency amid pressure.

Editorial Desk

October 13, 2026 One Min Read

POLICY WIRE — New Delhi, India — The Reserve Bank of India has introduced new restrictions on non-deliverable rupee derivative contracts, limiting their use to hedging purposes and increasing the cash reserve requirement for certain transactions.

The central bank’s move comes as the rupee faces downward pressure from rising oil prices and capital outflows. The revised rules also lower the transaction threshold for forex derivatives from $100 million to $5 million and require additional documentation for hedging activities.

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RBI officials emphasized that these measures aim to reduce speculative activity in foreign exchange markets and ensure greater transparency in large currency transactions. A 20% cash reserve requirement has been mandated for specific derivative contracts used to hedge against foreign currency exposure.

Reporting by Policy-Wire (PW)

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