RBI eases parts of its forex rules for banks
mumbai, April 21 -- The Reserve Bank of India (RBI) on Monday eased parts of its foreign exchange rules for banks, allowing certain related-party hedging transactions to continue and clarifying that they will not be treated as speculative trades.
Banks can continue undertaking back-to-back hedging transactions, including across overseas branches, as long as they are genuine risk-offsetting trades. The overall $100 million net open position (NOP) limit remains unchanged, and the revised rules take effect immediately, the central bank said in a circular.
The central bank has also allowed banks to retain existing positions within the $100 million cap until maturity, or modify them if required, removing the need for premature unwinding.
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