RBI Deputy Governor on Forex Market Future

RBI Deputy Governor Rohit Jain delivered a speech at the Annual Day of the Foreign Exchange Dealers' Association of India (FEDAI) on 'India's Foreign Exchange Markets: Getting ready for the next Decade'. He highlighted that local currencies will play an increasing role in cross-border trade and payments, reducing transaction costs and currency mismatches. He noted India's forex reserves grew from $38 billion in 2000 to $691 billion in 2026, and daily forex turnover doubled from $41 billion in FY22 to about $80 billion. Jain discussed the Special Rupee Vostro Account (SRVA) framework for rupee settlement, emphasizing its success depends on commercial viability and market-determined rates. He called for leveraging technology, including AI and machine learning, across the customer chain. He also flagged challenges: skewed participation of public sector banks in forex derivatives, and unauthorized online forex trading platforms operating outside FEMA and ETP regulations, leading to customer fraud complaints. He urged FEDAI members and banks to sensitize customers and staff, and to innovate for scale and resilience.