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What is the story about?
India’s biggest bank had about $5 billion of bets against the rupee that were impacted by the regulator’s crackdown on potential speculators, according to people with knowledge of the matter, roughly 20% of the total exposure.
State Bank of India is estimating losses of about ₹300 crore ($32 million) from the forced unwinding of these trades, the people said, asking not to be identified discussing confidential details. The hit is seen as manageable given the bank has total assets of more than $800 billion, they said, adding they expect the spot rupee to strengthen as SBI and others exit these positions.
A spokesman for the bank did not immediately reply to Bloomberg’s email seeking comment about the size of the exposure and the estimated loss.
India has moved swiftly to shore up its currency that has tumbled more than 3% this year as foreigners sell the nation’s stocks and rising oil prices widen its trade gap. The Reserve Bank of India has directed lenders to cap daily open positions in the onshore currency market at $100 million by April 10.
The outstanding bets involving such positions amounted to at least $30 billion, Bloomberg News reported earlier.
State Bank of India is estimating losses of about ₹300 crore ($32 million) from the forced unwinding of these trades, the people said, asking not to be identified discussing confidential details. The hit is seen as manageable given the bank has total assets of more than $800 billion, they said, adding they expect the spot rupee to strengthen as SBI and others exit these positions.
A spokesman for the bank did not immediately reply to Bloomberg’s email seeking comment about the size of the exposure and the estimated loss.
India has moved swiftly to shore up its currency that has tumbled more than 3% this year as foreigners sell the nation’s stocks and rising oil prices widen its trade gap. The Reserve Bank of India has directed lenders to cap daily open positions in the onshore currency market at $100 million by April 10.
The outstanding bets involving such positions amounted to at least $30 billion, Bloomberg News reported earlier.
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