India's central bank eased some restrictions on banks' offshore currency market transactions that it had imposed earlier this month to shore up the rupee.
The Reserve Bank of India said on Monday that it would withdraw measures issued April 1 that barred lenders from offering rupee-linked non-deliverable forwards, the most widely used tools for offshore trading.
However, banks still can't carry out all foreign-exchange derivative deals with so-called related parties, the RBI said. Transactions that are permitted include cancellation and rollover of existing deals and those under the so-called ‘back-to-back' route.
The steps helped stabilize the rupee after it weakened past 95 per dollar to a record low late March amid the oil shock sparked by the Iran war. The currency has recovered more than 2% after the first set of measures were announced on March 27.
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