Reuters Market Eye - The Reserve Bank of India’s move to allow exporters access to the forex market without having to first exhaust funds in their foreign currency accounts signals its comfort with current rupee levels, and is unlikely to have much impact on spot INR, say dealers.
The RBI had in May 2012 asked exporters to access forex markets only after fully utilising funds in exporter accounts at a time when the rupee was sharply falling and on its way to hit a life low of 57.32 in late June.
Some dealers say RBI’s announcement on Tuesday may lead to some rise in USD demand in spot from exporters, but nothing significant.
“What it means is the RBI’s comfort on the rupee. It is a significant dilution in the bearish set up on rupee,” says a senior treasury official.
Reporting by Subhadip Sircar