RBI allows forward contract in all transactions

Tags: News
Providing operational flexibility in external sector, the Reserve Bank today allowed forward contracts in all current and capital account transactions up to one year.

"...It has been decided to allow, in case of contracted exposures, forward contracts in respect of all current account transactions as well as capital account transactions with a residual maturity of one year or less to be freely cancelled and rebooked," RBI said in a notification.

The decision, it said, has been taken in view of the evolving market conditions and with a view to providing operational flexibility in respect of current and capital account transactions.

As far as the exposure of the FIIs/QFIs/other portfolio investors is concerned, forward contracts booked by these investors, once cancelled, can be rebooked up to the extent of 10 per cent of the value of the contracts cancelled, it said.

The forward contracts booked by these investors may, however, be rolled over on or before maturity, it said.

As per the existing guidelines, exporters are allowed to cancel and rebook forward contracts to the extent of 50 per cent of the contracts booked in a financial year for hedging their contracted export exposures.

At the same time, importers are allowed to cancel and rebook forward contracts to the extent of 25 per cent of the contracts booked in a financial year for hedging their contracted import exposures.

Post new comment

E-mail ID will not be published
CAPTCHA
This question is for testing whether you are a human visitor and to prevent automated spam submissions.

EDITORIAL OF THE DAY

  • Sebi must not exempt listed SMEs from its mandatory disclosure norms

    The Securities and Exchange Board of India (Sebi) has amended clause 49 of the listing agreement, which lays down the obligation of companies toward t

FC NEWSLETTER

Stay informed on our latest news!

INTERVIEWS

GV Nageswara Rao

MD & CEO, IDBI Federal Life

Timothy Moe

Goldman Sachs

Chander Mohan Sethi

CMD, Reckitt Benckiser India

COLUMNIST

Arun Kumar Jain

Why manufacturing needs innovation

Prime minister Narendra Modi’s call of “come — make in ...

Kuruvilla Pandikattu SJ

Warren Buffett’s key to happiness

Despite being the second richest American, Warren Buffett still lives ...

Gautam Gupta

In fashion, why quality must exceed quantity

Every time there’s a fashion week in India, my friends, ...

INTERVIEWS

William D. Green

Chairman & CEO, Accenture