The curbs placed by RBI in December are seen by experts as opposite to RBI's capital account management strategy.
RBI had limited the positions in unhedged foreign currency that banks can hold overnight as well as barred the companies from cancelling and re-booking the forward contracts with the same underlying exposures.
The curbs were aimed at limiting the free-fall of Indian currency even as investors turned towards buying US dollars.
“The whole purpose of our capital management strategy is to bring as much liquidity into the market as possible, as many legitimate participants as possible, and when we impose curbs, we are actually restricting the space," said Gokarn as per the report.
Indian rupee had slipped to lifetime low of 54.29 per dollar mark on December 15, 2011 after which RBI imposed curbs on such currency trading and since then Rupee has recovered about 9 per cent after losing over 16 per cent in 2011.
Dion Global Solutions Ltd