Source: Reuters (via feed)
Indian rupee forward premiums dropped further on Friday. This movement followed a sizeable intervention in the currency market. Seven bankers said the decline in forward premiums reflected bets that the Reserve Bank of India may conduct a foreign exchange swap.
The drop in forward premiums was noted after the currency market intervention. The bankers mentioned that the market is factoring in a possible RBI swap. No additional details about timing or size of the swap have been provided.
BizTrendWire Insight:
Forward premiums in currency markets can reflect expectations reported by market participants. Such movements may coincide with recent central bank interventions.
Forward premiums in currency markets can reflect expectations reported by market participants. Such movements may coincide with recent central bank interventions.