Over the years, to enable the firms to manage their foreign exchange risk flexibly and efficiently, several relaxations have been introduced, such as, carrying out derivative transactions on the basis of past performance rather than on the basis of individual underlying contracts, cancelling derivative contracts even as the underlying exposure exists (and getting the benefit or bearing the loss thereof) with scope to rebook the contract against the same exposure, etc.
These relaxations can potentially be used to take a view on the Rupee when expectation of sharp depreciation (or appreciation), rightly or wrongly, is strong. This aggravates the market conditions.