The Reserve Bank of India recently introduced new foreign exchange and liquidity policies that have notably strengthened the spot USD/INR exchange rate. According to FX Street, these measures have made the spot market more robust, supporting the Indian Rupee against the US dollar.
However, the same policies have increased pressure on other market segments, including forwards, offshore non-deliverable forwards (NDFs), and bonds. This has created additional stress in these areas, reflecting a complex impact across different parts of the FX and debt markets.
For Japanese investors and institutions active in emerging markets, these developments highlight the evolving dynamics in India’s currency and debt markets, which can influence cross-border investment strategies and hedging approaches.