Mumbai, Sept 24: The Reserve Bank of India (RBI) is unlikely to ease restrictions on re-booking of cancelled foreign exchange import contracts, a top source at the central bank said on Friday. "Any easing of restrictions on re-booking cancelled import contracts is not going to be considered," he said."Permitting hedging of anticipated exposures in foreign exchange is also not being considered."
The ban on re-booking cancelled import contracts and hedges on non-trade exposures were imposed in August 1998, as part of measures to curb speculation, when the rupee slipped to its all-time low of 43.7 per dollar after India's nuclear tests and economic sanctions imposed by the US.
RBI deputy governor YV Reddy had earlier this month told a foreign exchange conference the central bank was continuously reviewing restrictions on import re-booking and on hedging anticipated exposures, but with caution.
"..The issue of restoration of facility to rebook cancelled contracts need to be reviewed with caution," Reddy said.
Recent newspaper reports that the restrictions were under review and may soon be eased had led to some import demand, dealers said.
"The newspaper reports are absolutely baseless...the market is overplaying the issue," the RBI official said.
The rupee was quoted at 43.56/57 per dollar on Friday morning, off opening lows of 43.58.
It has weakened more than three paise (0.03 Rupees) during the week on dollar demand from importers, part of which were regular month-end remittances by state-run firms.
Copyright © 1999 Indian Express Newspapers (Bombay) Ltd.