Indian Banks Trying To Use Reserve Bank of India Money in Trade Strategy
Recently, the Reserve Bank of India is trying to flush out excess dollars from the market. This has created a loophole for local banks to make a unique opportunity.
Lenders are trying to make a sizable profit through this loophole, according to experts in this matter. A large bank could easily rack up exposures of more than $1 billion using this strategy, multiple traders said, asking not to be identified as the deals aren’t public. The top beneficiaries of these trades are foreign banks, which have large and easy access to dollar stockpiles.
At the center of the strategy at RBI is to remove the limit for all local banks for foreign exchange. Governor Shaktikanta Das is expecting local banks to use their excess US dollars to buy their treasuries. The center is expecting them to buy US ...