Bloomberg News

Standard Chartered’s Narayan Says RBI Rules Are ‘Rupee Positive’

December 15, 2011

Dec. 15 (Bloomberg) -- Ananth Narayan G., head of South Asia currency and bonds trading at Standard Chartered Plc, comments on the outlook for India’s currency after the Reserve Bank of India tightened rules in forward trading in rupee, saying canceled forward contracts can’t be bought again.

The new rules will take immediate effect, it said in a statement on its website today.

“In the short-term this is definitely rupee positive and will improve sentiment and show RBI is for curbing speculation. It will bring down liquidity in the market and increase transaction costs. Overall volume in the market will also come down.

‘‘Hopefully, this along with some intervention from the RBI will buy time for the country to address medium-term issues such as current account deficit and capital outflows, which are the root cause of the rupee’s weakness.’’

--Editor: Arijit Ghosh

To contact the reporter on this story: V. Ramakrishnan in Mumbai at rvenkatarama@bloomberg.net

To contact the editor responsible for this story: Sandy Hendry at shendry@bloomberg.net


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