India market regulator seeks to halt rupee slide

NEW DELHI, July 9, 2013 (AFP) – India’s financial markets regulator on Tuesday sought to halt the slide of the rupee by restricting speculative trading in the currency — a day after the unit hit a new lifetime low against the dollar. The Securities and Exchange Board of India (SEBI) said it was taking the action “in view of the recent turbulent phase of extreme volatility in the dollar-rupee exchange rate” and in consultation with the central bank.

SEBI said it would “increase margin requirements for currency derivatives”, among other steps, making it costlier for traders to bet on the rupee’s future value.

The decision announced on SEBI’s website came after the rupee slid to a record low of 61.21 against the dollar on Monday.

It followed an order by the Reserve Bank of India late Monday to the nation’s banks to stop trading for their own accounts in domestic currency futures.

The Indian currency steadied on Tuesday to trade at 60.13 rupees to the dollar in the wake of the measures but remained under pressure.

India has been the worst performing Asian currency against the dollar in the last quarter, as worries mount that the US Federal Reserve will reduce its economic stimulus programme that has prompted inve