RBI eases norms for foreign investors in currency derivatives

Jun 20 2014, 20:22 IST
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At the same time, domestic players like exporters and importers would now require underlying exposure if they position beyond USD 10 million. Reuters At the same time, domestic players like exporters and importers would now require underlying exposure if they position beyond USD 10 million. Reuters
SummaryTo enhance the depth of the foreign exchange market, the Reserve Bank today allowed foreign portfolio investors...

three years' imports turnover or the previous year's turnover.

The participants would furnish, to the trading member of the exchange, a certificate from their statutory auditors regarding the limit mentioned above along with an undertaking signed by the Chief Financial Officer (CFO) to the effect that at all time, the sum total of the outstanding OTC derivative contracts, it said.

The central bank had in July last year imposed curbs such as doubling of margin requirement and a ceiling on position limits on exchange-traded currency derivatives.

The restrictions were imposed to check speculation in the foreign-exchange market. The rupee touched a record low of 68.85 on August 28.

The RBI had doubled the margins, or initial money deposited, while trading derivatives in this segment to check the rupee's slide.

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