Indian rupee FX premiums jump after RBI policy leaves traders bracing for more sell/buy swaps

What happened: The implied 1-year dollar/rupee forward premium rose after the RBI policy left traders expecting more sell/buy swaps. Key numbers: 1-year premium up 20 bps to 3.66%, a six-month high. It rose 14 bps on Tuesday. Spot USD/INR up 0.28% at 96.70, near its record 96.96. Why it matters: Bankers said the premium move is amplified by the rising USD/INR spot. RBI chief Sanjay Malhotra said the RBI would use an appropriate mix of liquidity management tools.

The implied 1-year dollar/rupee forward premium rose after the RBI policy left traders expecting more sell/buy swaps.

Bankers said the premium move is amplified by the rising USD/INR spot. RBI chief Sanjay Malhotra said the RBI would use an appropriate mix of liquidity management tools.