The Reserve Bank of India jolted currency markets by barring banks from offering the most widely used offshore rupee trading instrument, sending the currency to its biggest gains since 2013.

Indian bonds may be heading into a challenging stretch after the Reserve Bank of India’s dramatic move to cap onshore currency wagers raises the possibility of stronger measures — including possible interest rate hikes — to support the rupee.

The biggest shock to India’s currency market in years is set to worsen as banks prepare to unwind billions of dollars more in arbitrage trades.

India’s most dramatic step in more than a decade to curb speculation in the foreign-exchange market delivered only fleeting gains, with the rupee’s initial jump reversing.

India took one of its most forceful steps in over a decade to curb speculative bets against the rupee, triggering a short squeeze.

Lenders in India are urging the central bank to rethink new rules for foreign-exchange transactions designed to shore up the rupee, saying the measures would saddle them with large losses, according to people familiar with the matter.

India’s central bank stepped up its defense of the battered rupee, rolling out a measure to curb speculation after it slid to a new low amid concerns of a widening trade gap driven by the US-Iran war.

India will borrow 8.2 trillion rupees ($86.5 billion) in the first half of the financial year beginning April 1, around half of the amount scheduled for the full 12-month period, the government said in a statement Friday.

India’s rupee weakened to a fresh low, lagging behind regional peers, as foreign investors sped up sales of stocks and bonds on fears that elevated energy prices would drive up the import-heavy nation’s inflation and trade deficit.

Indian insurers asked their regulator to soften a proposal that requires them to set aside capital when they buy state bonds, warning it would make the debt less attractive to own, according to people familiar with the matter.

Indian insurers are turning to state government bonds for a popular derivatives trade, locking in higher yields amid record provincial debt supply.

India ramped up use of a key tool for defending the rupee to record levels as the currency weakened to an all-time low against the dollar, according to people familiar with the matter.

Local shares have shed more than $600 billion in market value this year.

Global lenders pushed back against a proposal by India’s central bank for more reporting of offshore rupee trades, according to people familiar with the matter.

Global lenders pushed back against a proposal by India’s central bank for more reporting of offshore rupee trades, according to people familiar with the matter.

Singapore Exchange Ltd. will launch futures tied to government bonds of some Asian countries as investors seek to hedge their risks.

India’s rupee advanced the most in Asia on Thursday as the central bank stepped in to shore up the currency after it weakened to a record low in the previous session.

India’s rupee fell to a record low, while stocks and bonds declined amid concerns that rising crude prices — driven by the escalating conflict in the Middle East — may stoke inflation and worsen the country’s widening trade deficit.

Costly oil will pressure the rupee and push up inflation, Macquarie warns.

Central banks in Indonesia and India intervened in the foreign-exchange markets to support their respective currencies as emerging market assets came under pressure following the Iran war.