On Monday, the Reserve Bank of India (RBI) partially eased restrictions on banks concerning rupee-linked non-deliverable forwards (NDFs), which were initially imposed on April 1 due to heightened volatility in the foreign-exchange market. The revised rules allow banks to engage in certain related-party transactions, including the cancellation and rollover of existing contracts. However, banks are still prohibited from undertaking all foreign-exchange derivative transactions with related parties, and the $100 million cap on net open positions in the onshore deliverable market remains unchanged. Market analysts noted that the RBI's decision reflects a lower perceived arbitrage risk, as banks complied with earlier regulatory deadlines. The rupee has been under pressure, depreciating by over 4% against the dollar amid geopolitical tensions in West Asia, particularly following the US Navy's seizure of an Iranian vessel, which raised concerns over energy flows and pushed crude oil prices higher. Despite the relaxation of some restrictions, analysts believe the move will not immediately impact the spot rupee, as broader global factors continue to influence currency trends. The RBI's cautious approach aims to balance genuine hedging needs while preventing destabilizing capital flows.