First, there has come to exists a large offshore market in Rupee. Rupee futures are now traded in some of the international exchanges. There is a sizeable Non-Deliverable Forward (NDF) market in Rupee in several international financial centers. This market is opaque and the exact size or details of participants is not known.
Our interaction with market participants tend to indicate that the figures published by the Bank for International Settlements (BIS) in the last two triennial surveys may have been over-estimated, but surely they are large enough to impact the domestic market, particularly during periods of heightened volatility.