RBI's FX Cap: Banks Face Billions in Losses, Rupee Set to Surge Monday

• RBI's new rule caps onshore open FX positions at $100 million, forcing banks to unwind positions.
• Banks anticipate significant mark-to-market losses, potentially totaling Rs 4,000 crore if open positions are $40 billion.
• The move aims to curb the rupee's sharp depreciation, especially after a rapid fall on Friday.
• Bankers are appealing to RBI for relaxations, hoping for tweaks to the rule or extended timelines.
• The cap reverses RBI's recent liberalization efforts connecting onshore and offshore rupee markets.