Rupee Woes Mount as India Central Bank Bans Import-Finance Tool
A cashier examines Indian rupee banknotes in Mumbai.
Photographer: Dhiraj Singh/BloombergThis article is for subscribers only.
Traders can add one more reason to sell the Indian rupee. Stung by a $2 billion bank fraud, the Reserve Bank of India banned a key import finance tool, a move that may push up short-term dollar demand.
The central bank barred lenders from issuing guarantees in the form of letters of undertaking to overseas banks on Tuesday as it clamped down on the import-financing avenue used by two jewelers to perpetrate the nation’s biggest bank scam.