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India banned a $30B rupee trade. The alpha migrated.
The RBI's April 2 NDF ban forced unwinding of at least $30 billion in arbitrage positions in a single session. The rupee posted its biggest single-day gain in 12 years.
Offshore NDFs settle in dollars under foreign jurisdiction. India cannot prohibit contracts cleared in Singapore or London. The capital control asymmetry that built this market is intact.
Three sovereign responses, same escalation: Argentina froze settlement, Malaysia redesigned the architecture, India banned the instrument. Each was followed by venue migration.
The six distinct alpha strategies in this trade, plus the $400M Barclays fixing settlement that exposed the deepest structural risk, are in the full piece.
May 5
at
2:58 PM