RBI Monetary Policy: ETCD position limit at $100 m per user across exchanges

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Mumbai | Published: February 8, 2018 2:39:38 AM

The RBI has subsequently permitted introduction of currency option contracts involving the rupee on exchanges.

The Reserve Bank of India (RBI) on Wednesday consolidated the positional limits in exchange traded currency derivatives (ETCD) to a single limit of $100 million per user across all exchanges.

The Reserve Bank of India (RBI) on Wednesday consolidated the positional limits in exchange traded currency derivatives (ETCD) to a single limit of $100 million per user across all exchanges. The central bank stated that currently, users can take positions in ETCD, without having to establish proof of underlying exposure, upto $15 million per exchange for USD-INR and $5 million per exchange for other currency pairs involving the rupee. The RBI has subsequently permitted introduction of currency option contracts involving the rupee on exchanges. “In order to encourage further participation in exchange traded currency derivatives, it is now proposed to merge these position limits across all foreign currency-INR pairs and provide a single limit of $100 million per user (both resident and non-resident) across all exchange traded currency derivatives, in all exchanges combined,” the central bank stated.

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