According to a latest update from the Reserve Bank of India, there is evidence that onshore exchange rate, especially in the of volatility, guided by the price movements in offshore markets. Over a period, regulations have been liberalized to permit Rupee invoicing of trades, Rupee borrowings under the External Commercial Borrowings (ECB) route, the issue of Masala Bonds, centralized hedging etc., which have increased Rupee exposure of non-residents. There is evidence that onshore exchange rate, especially in times of volatility, is guided by the price movements in offshore markets. The central bank noted that linkages between onshore and offshore NDF markets shows that when Rupee is appreciating, there is a bi-directional relationship between the two markets, while there is a unidirectional impact of NDF market on onshore market when the Rupee is depreciating.

• The Indian rupee depreciated this week by 0.26 paisa lost compared with the previous week close.
• Last week Indian rupee closed at ₹68.42 with the gain of 0.60 paisa.
• This week i.e. on Friday closed at ₹68.68 with the loss of 0.24 paisa on Friday.
• Highest gain 0.13 paisa on Thursday and Highest loss is 0.24 paisa on Friday.