Rupee NDF volume hits record high on arbitrage activity

RBI INTERVENTIONS IN THE NDF MARKET KEPT THE LOCAL AND NDF RATES ON PAR FOR MUCH OF 2024

- Reuters

MUMBAI: Trading volume in dollar-rupee non-deliverable forwards (NDF) at India's offshore finance hub soared to a record high in December as banks and companies lapped up arbitrage opportunities amid a worsening outlook for the rupee.

Banks executed NDF trades worth more than $161 billion at the offshore hub, a sharp rise of 140% from a year ago, data from Clearing Corporation of India showed. The trades had averaged about $111 billion per month over the rest of 2024.

NDF activity by banks' clients spiked by more than 10 times to $39.30 billion last month compared to the total trades between January and November.