Business
India unleashes curbs on rupee bets as intervention costs swell
Late Friday, the Reserve Bank of India announced new rules capping the open positions banks can hold in the onshore currency market at $100 million at the end of each trading day. The change, effective April 10, forces lenders to shrink their books, limiting their ability to run large one-sided bets against the rupee.
The urgency reflects deep concern about the rupee, which has slid to successive record lows following the Iran war. That is pushing the RBI to shift away from relying mainly on spot and forward market interventions — tools that have already contributed to a more than $30 billion drawdown in foreign-exchange reserves in the first three weeks of March, according to people familiar with the matter, to more direct measures targeting financial institutions.
“The move signals clear discomfort with rupee weakness and reflects a shift from direct intervention to controlling market positioning, offering near-term stability but limited influence on longer-term fundamentals,” said Kunal Sodhani, head of treasury at Shinhan Bank in Mumbai.
Lenders are seeking to delay the deadline to comply, warning that such a rapid unwind may trigger large losses, and urging that the rule apply only to new bets, people familiar with the matter told Bloomberg News.
BloombergPressure on the rupee has mounted since the Iran war broke out a month ago. The currency has fallen more than 4% over that period to 94.82 as of Friday, and is Asia’s worst performer this year. Uncertainty over the duration of the conflict has prompted global funds to pull more than $11 billion from Indian equities, while index-eligible bonds have seen record outflows of $1.6 billion in March.
Part of the challenge for policymakers is where that pressure is coming from. While the rupee trades in Mumbai, price signals are increasingly determined overseas in hubs like Singapore, London and New York, through derivatives that let investors take positions without access to domestic markets.That makes traditional intervention less effective. Large positions can build outside India’s regulatory reach and feed back to domestic markets via arbitrage, forcing the RBI to respond by selling dollars, draining reserves while doing little to curb the underlying build-up.
By capping how much risk banks can carry, authorities are trying to make it harder for those positions to accumulate in the first place — echoing steps taken in 2011, when the RBI tightened banks’ net open position limits.
“This is a period of extreme stress for the rupee because of an unprecedented energy shock,” said R. Gurumurthy, a former RBI regional director who previously oversaw dollar-rupee interventions. “If you look at past instances where the rupee has faced such rapid depreciation in such a short time, the RBI has always stepped in with exceptional steps.”
BloombergThe growth in offshore trading has long unsettled the RBI. When London overtook Mumbai as the top center for rupee trading in 2019, officials warned that offshore rupee trading was being driven by “speculators and arbitrageurs.”
Most of this activity is in non-deliverable forwards — contracts commonly used in emerging markets, especially for currencies that are not freely traded — allowing investors to hedge or bet on future values without physically exchanging the rupee.
The market’s rapid expansion has coincided with a persistent slide in the rupee, even as India remains one of the fastest-growing major economies, expanding at more than 7% annually in recent years. Capital markets have also grown, drawing about $16 billion from foreign investors into Indian bonds since their inclusion in JPMorgan Chase & Co.’s flagship index in June 2024.
Yet the rupee has weakened more than 25% since 2019, underscoring the disconnect between strong domestic fundamentals and currency performance.
The offshore market “exhibits exaggerated movements,” said G. Mahalingam, a former RBI executive director who was part of a 2019 task force set up to examine overseas rupee trading. “It takes the lead and the domestic market follows.”
Root Problems
Intervention alone has struggled to close that gap. The RBI was a net seller of $51.7 billion of dollars last year, the most on record, and has continued to step in during bouts of volatility, including at the onset of the Iran conflict.
The impact has been limited, highlighting the constraints of direct intervention when it runs up against broader macro forces like a strong dollar and shifting global risk sentiment. Other emerging-market currencies like the Philippine peso and South Korean won have also tumbled after the Middle East conflict broke out.
“Trying to stem currency depreciation by putting the squeeze on offshore markets rarely has the intended effect of staving off speculative pressures,” said Eswar Shanker Prasad, senior professor of trade policy at Cornell University. “The root problems underlying a currency’s falling value need to be addressed.”
With intervention proving costly, the central bank has widened its approach. Besides the limits on open positions, it has also proposed stricter reporting rules requiring overseas affiliates of lenders to disclose rupee-linked trades to a clearing house supervised by the RBI, in a bid to better understand who is driving offshore activity and why.
The plan has met resistance. Global banks said it could breach client confidentiality, conflict with data and reporting rules in other jurisdictions and require major changes to their systems, data formats and legal agreements.
“Some banks may need time to set up their reporting mechanisms, which could result in a temporary, limited decline in liquidity,” said Rajeev De Mello, global macro portfolio manager at Gama Asset Management.
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A United Airlines flight bound for Spain returned to Newark Liberty International Airport on Saturday night after a potential security concern prompted the aircraft to turn around over the Atlantic Ocean.
United Flight 236 departed Newark en route to Palma de Mallorca, Spain, but reversed course about 90 minutes into the trip and landed back in New Jersey later that evening.
A spokesperson for United Airlines told FOX Business there were 190 passengers and 12 crew members aboard the Boeing 767 aircraft.
“United flight 236 from Newark to Palma De Mallorca, Spain safely returned to Newark to address a potential security concern,” the airline said in a statement. “The flight continued to Palma De Mallorca with a new crew.”
UNITED FLIGHT CARRYING 221 PASSENGERS HITS POLE AND TRUCK ON APPROACH TO NEWARK
A United Airlines Boeing 767 takes off. A United flight from Newark to Palma de Mallorca, Spain, returned to New Jersey after a potential security concern prompted the aircraft to turn around over the Atlantic Ocean. (Andia/Universal Images Group via Getty Images / Getty Images)
AirLive.net reported that the incident began after flight attendants instructed passengers to disable their Bluetooth connections. Passengers later said the crew repeatedly warned that the request came from United’s operations center and that the flight could not continue unless the issue was resolved.
One passenger told the outlet that crew members made several announcements regarding a potential safety concern linked to a Bluetooth device and eventually issued a final warning before the aircraft changed course.
The warnings reportedly became increasingly urgent as crew members attempted to identify the source of the device. Passengers cited by the publication said flight attendants indicated the issue had been escalated and that the aircraft could be forced to return if the matter remained unresolved.
UNITED PILOT REPORTS MIDAIR DRONE SCARE NEAR AIRPORT DURING LANDING APPROACH
A United Airlines flight from Newark to Spain turned around over the Atlantic and returned safely to New Jersey after a potential security concern emerged onboard. Reports indicate the issue stemmed from a Bluetooth device whose visible name included (REUTERS/Eduardo Munoz/File Photo / Reuters Photos)
Air traffic control communications reviewed by AirLive.net indicated the aircraft returned to Newark after concerns arose about the name of a Bluetooth-enabled device visible to others onboard.
The outlet reported that the device’s discoverable name included the word “bomb,” which led to a security response and the flight’s eventual return to Newark.
The flight crew ultimately decided to discontinue the trip and return to Newark rather than continue across the Atlantic with the issue unresolved, according to the report.
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Flight-tracking data shows the route of United Airlines Flight 236, which turned around over the Atlantic Ocean and returned to Newark Liberty International Airport while en route to Palma de Mallorca, Spain, on May 30, 2026. (Credit: FlightRadar24.com / Fox News)
After the aircraft landed safely, law enforcement officers and security personnel met the plane. Passengers were removed while authorities conducted a security inspection.
Travelers were permitted to take only limited personal items with them as they exited the aircraft, according to the report. Passengers were later rescreened before boarding a replacement flight, while the aircraft and checked luggage underwent additional security screening.
Passengers were transported around the airport while security personnel inspected the aircraft, according to the report.
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United has not publicly identified the passenger connected to the device or announced whether any charges or penalties are being considered.
FOX Business has reached out to the Port Authority of New York and New Jersey for additional information about the incident.
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Berkshire Hathaway Has First Takeover by CEO Abel, Paying $8.5 Billion for a Homebuilder
Berkshire Hathaway agreed on Sunday to buy home builder Taylor Morrison Home Corp.for TMHC -0.39%decrease; red down pointing triangle $6.8 billion in cash.
Berkshire will pay $72.50 per share for the Scottsdale, Arizona-based home developer, a 24% premium to Taylor Morrison’s closing stock price of $58.50 on Friday.
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Quantinuum attracts strong demand ahead of debut. (0:17) Broadcom earnings focus shifts to accelerating AI chip demand. (1:09) May jobs report tests outlook for a cooling labor market. (1:58)
The following is an abridged transcript:
Quantum computing firm Quantinuum (QNT) is set to go public this week, with reports that the offering is already oversubscribed by a double-digit multiple of the shares available.
The company, which is owned by Honeywell (HON), plans to offer 21.05 million shares at between $45 and $50 each. At the top end of that range, Quantinuum would raise about $1.05 billion and be valued at roughly $13 billion.
The stock is expected to trade on the Nasdaq under the ticker symbol QNT.
Quantinuum generated 2025 revenue of $30.9 million, up from $23 million in 2024, while its net loss widened to $192.6 million as the company continued investing in growth and commercialization.
The company recently signed an agreement with the U.S. government to receive research and development funding aimed at addressing technology bottlenecks in fault-tolerant trapped-ion quantum computers.
On the earnings front, Broadcom (AVGO) highlights the week when it reports Wednesday after the close.
Wall Street expects EPS of $2.40 on revenue of about $22 billion.
Analysts have turned increasingly bullish ahead of the report.
Oppenheimer expects a beat-and-raise quarter driven by AI demand and says Broadcom remains the number-two AI accelerator player behind Nvidia (NVDA).
Susquehanna also raised its price target ahead of results, citing continued momentum in Broadcom’s custom AI chips and networking business.
Analysts said AI revenue could exceed $100 billion in fiscal 2027 as customer demand continues to broaden.
Also on the earnings calendar, Hewlett Packard (HPE) and Credo Technology (CRDO) report Monday.
Earnings spotlight: Tuesday: Palo Alto Networks (PANW) and Ulta Beauty (ULTA) are up Tuesday.
CrowdStrike (CRWD) and Medtronic (MDT) joing Broadcom on Wednesday.
Ciena (CIEN), Lululemon (LULU) and DocuSign (DOCU) weigh in on Thursday.
On the economic calendar, Friday’s jobs report is the main event.
Economists expect 96,000 jobs to have been added in May, down from 115,000 in April, while the unemployment rate is expected to hold at 4.3%.
Average hourly earnings are forecast to rise 0.3% for the month.
Wells Fargo says the labor market remains stuck in a low-fire, low-hire environment that is no longer deteriorating, but isn’t showing meaningful improvement either.
In the news this weekend, Waymo unveiled its new Ojai robotaxi minivan, an all-electric vehicle designed specifically for autonomous ride-hailing rather than retail sales.
The company says the vehicle is roomier, cheaper to operate and built around its sixth-generation self-driving system. Analysts say the lower operating costs could eventually help Waymo undercut human-driven ride-hailing services in some markets.
And Microsoft (MSFT) and Nvidia (NVDA) are expected to unveil the first Windows PCs powered by Nvidia chips as the primary processor at Computex and Microsoft’s Build conference this week.
The launch could mark a significant expansion of Nvidia’s push beyond AI servers and into the PC market.
And for income investors, McDonald’s (MCD) goes ex-dividend on Tuesday and pays out on June 16.
Halliburton (HAL) goes ex-dividend on Wednesday with a June 24 payout date.
Cigna (CI) goes ex-dividend on Thursday and pays out on June 18.
And Western Digital (WDC) goes ex-dividend on Friday with a payout date of June 17.
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