RBI's new FX curbs increase costs for banks, complicating arbitrage exits and potentially leading to larger losses.
RBI fresh FX curbs trap banks in trades once seen low risk
The Reserve Bank of India (RBI) imposed fresh foreign exchange (FX) trading restrictions, trapping banks in previously low-risk arbitrage positions and increasing operational costs. The move disrupts traditional risk mitigation strategies, potentially exposing banks to larger financial losses and liquidity constraints.