The Reserve Bank of India was under a false impression that the falling rupee will be taken care by market forces. It finally intervened late Thursday when dollar touched an all time low of 54.29.
On Thursday, it announced a slew of measures to support the rupee and curb build up of speculative positions in the foreign exchange market.
The measures include withdrawal of the facility to cancel and rebook forward contracts by resident and foreign institutional investors with immediate effect.
A forward contract is a binding bilateral agreement either to buy or to sell a certain amount of a foreign currency at a predetermined price at a specified time in the future.
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