Why RBI Killed Currency Trading In India?

What effect does RBI have to face if?
If the rupee gets stronger and weaker suddenly?
Impact on Economy:

Stronger Rupee: A sudden appreciation of the rupee can make imports cheaper, benefitting consumers and businesses that rely on imported goods and inputs. However, it can negatively affect exporters by making their products more expensive in foreign markets.
Weaker Rupee: Conversely, a sudden depreciation of the rupee can make exports more competitive but can increase the cost of imports, leading to higher inflationary pressures, especially if India is heavily reliant on imported goods like oil.
Inflation Management:

Stronger Rupee: A stronger rupee can help control imported inflation by reducing the cost of imported goods and commodities, such as crude oil. This can provide relief to the RBI in managing inflationary pressures.
Weaker Rupee: On the other hand, a sudden depreciation of the rupee can exacerbate inflationary pressures, especially if imported goods become more expensive, leading to higher consumer prices.
Monetary Policy:

Stronger Rupee: A strong rupee may give the RBI more room for monetary policy maneuvering, allowing it to maintain accommodative policies or even consider rate cuts to stimulate economic growth.
Weaker Rupee: Conversely, a sharp depreciation may prompt the RBI to adopt a more hawkish stance, considering the inflationary implications and the need to stabilize the currency.
Foreign Exchange Reserves Management:

Stronger Rupee: In the case of a sudden appreciation, the RBI may intervene in the foreign exchange market by purchasing foreign currencies to prevent excessive strengthening of the rupee. This can lead to an accumulation of foreign exchange reserves.
Weaker Rupee: If the rupee experiences rapid depreciation, the RBI may utilize its foreign exchange reserves to intervene in the currency markets and stabilize its value.
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[ravishetti]

RBI 2008 se so raha tha.. Options bhi to hedging k liye hi hai. Usko bhi ban kardo fir

[aakash__deep]

Agar Usdinr me volume hi nahi hogi to Hegde karne wale kaha se hedge krenge?, , , , 🧐

Abhi hi dekh lo lakho ki volume lakhne wale contract ab just kuj thousand me aa gye hai sirf fut or options ki to vaaat lag gyi hai..
very good decision RBI 😂