RBI’s Currency Intervention Ends Up Hurting Rupee Carry Trade
- Dollar-rupee forward premiums slide to lowest in a decade
- Central bank’s forward-dollar book has dropped to $20 billion
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The Reserve Bank of India’s currency intervention is making the rupee less attractive for carry traders, analysts said.
Its intervention in the spot and forward markets have helped pushed the 12-month implied yields on the rupee -- typically a reflection of interest rate differentials with the US -- to the lowest since 2011, eroding its appeal.