India central bank rupee curbs to force unwinding of arbitrage bets, traders say - Reuters

India's central bank has imposed new curbs on rupee trading that traders say will force them to unwind arbitrage positions—bets that profit from price differences between markets. Arbitrage strategies typically exploit gaps between the domestic rupee market and offshore trading, allowing traders to lock in low-risk profits. The Reserve Bank of India's restrictions appear designed to tighten control over currency flows and reduce speculative activity in the rupee. Traders face pressure to exit these positions, which could reduce rupee volatility and limit opportunities for carry-trade profits. The move reflects the central bank's broader effort to manage currency stability amid global market pressures.