Rupee Weakens In NDF Market As IAF Executes Operation Sindoor Against Pakistani Terrorists
The Indian Rupee weakened in overseas trading on Wednesday, following a dramatic escalation in regional tensions as India carried out strikes on multiple targets in Pakistan and Pakistan-occupied Jammu and Kashmir.
In the non-deliverable forward (NDF) market, the one-month forward rate for the rupee pointed to a potential drop when the domestic currency markets open. As per forecasts cited by news agency Reuters, the rupee could open around 84.64 to 84.68 against the US Dollar, slipping from Tuesday's closing level of 84.4325.
What Is NDF Market?
The Non-Deliverables Forward (NDF) market is an offshore financial market where participants trade forward contracts for currencies that are not freely traded or convertible. These contracts are settled in a major currency, typically the US Dollar, without the actual delivery of the underlying currency.
NDFs are commonly used to hedge or speculate on exchange rate movements in restricted or emerging markets, such as the Chinese yuan or Indian rupee, offering investors exposure without breaching local currency regulations.
Operation Sindoor
The market reaction came swiftly after India confirmed that it launched coordinated strikes against 9 terror camps across Pakistan and Pakistan-Occupied Kashmir. The operation was in response to the deadly attack in Kashmir last month that claimed 26 lives.
At least eight people were killed during Wednesday's cross-border offensive, according to early reports. Pakistan called the coordinated strikes a "blatant act of war".
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