The Reserve Bank of India forces banks to close their short positions in the rupee, banks face potential losses of hundreds of millions of dollars.

During the Middle East conflict, as the rupee exchange rate fell to a new low, the Reserve Bank of India forced domestic banks to close out rupee short positions in both domestic and foreign markets. According to multiple bankers, this move caused unease among banks and investors as the central bank did not immediately provide an explanation. They were unclear about the true intentions of the Reserve Bank of India and questioned its approach to risk management.