Whilst this sounds like the RBI is purchasing dollars like crazy, this might have been the unwinding of forward contracts". RBI buys each in the money market (and owns dollars outright, which reflects in the forex reserves) and in the forward industry (exactly where a purchase will acquire dollars at a future date, so it will be an outstanding" obtain). When that future date comes, the RBI can decide on to get the dollars and add to forex reserves, or roll it over to other forward contracts.

This kind of threat management remains prevalent across the monetary markets, like our personal. It was a similar problem that saw broker Cortex Securities taken out in 2008 when its clientele defaulted on leveraged exposures they had to several tiny-cap stocks. That default ended up costing Absa, which was backing Cortex, more than R1bn.

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Extreme liquidity and the availability of high leverage have helped to spur the market's fast growth and made it the ideal location for quite a few traders. Positions can be opened and closed inside minutes or can be held for months. Currency rates are based on objective considerations of provide and demand and cannot be manipulated conveniently for the reason that the size of the industry does not let even the biggest players, such as central banks, to move prices at will.