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Investing.com -- The Reserve Bank of India (NSE:BOI) (RBI) took action in the foreign exchange market this week to limit speculation in the rupee, an unexpected move that caught traders off guard who anticipated a more laissez-faire stance from the new governor, according to an inside source.
The decision to intervene was made on Monday and Tuesday after the RBI noticed an unusual increase in speculative positions, which exerted additional pressure on the local currency, the source revealed. The individual requested anonymity due to the sensitivity of internal affairs. The central bank will not hesitate to intervene suddenly and significantly to avoid a buildup in speculative bets, the source added.
The regulator has been closely monitoring open positions in the currency markets since the rupee has faced pressure in recent weeks, according to the same source. The RBI’s stance on the rupee has not changed, it is not aiming for a specific level for the currency, but will step in to mitigate volatility, the person affirmed.
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