RBI's New Norms: Rupee Under Pressure as Banks Unwind $20-40 Billion Positions

• RBI's tightening of net open position norms is reshaping currency market dynamics, according to Jayesh Mehta.
• Banks are unwinding an estimated $20 billion to $40 billion in positions, pressuring the rupee until the April 10 deadline.
• The second circular addressed loopholes, preventing onshore money from bypassing restrictions on net open positions.
• The onshore-offshore spread is expected to normalize to 50-60 paise after being near zero.
• Post-April 10, the rupee's movement will be driven by underlying fundamentals, global cues, and foreign investor flows.