The Reserve Bank of India said it has widened foreign-exchange controls to
support the rupee, citing persistent pressure from high oil prices and foreign
capital outflows and adding restrictions aimed at preventing certain derivatives
trades from weighing on the currency. The rupee rose as much as 0.6% on Tuesday
to 95.2550 per USD, after a 1% gain on Monday; it remains down more than 5%
year-to-date and among the weaker Asian currencies. Kunal Sodani, head of funds
at Shinhan Bank Mumbai, said arbitrage in the FX market has been largely
suppressed and the new measures further that aim to manage market behavior and
volatility; he expects the rupee to trade in a roughly 95.30–96.00 per USD range
in the near term.
