RBI issues final directions on Hedging of Foreign Exchange Risk

Apr 08, 2020 | by Avantis RegTech Legal Research Team

Industry Specific Compliance

The Reserve bank of India (RBI) on April 07, 2020, has issued directions on Hedging of Foreign Exchange Risk based on the public comments received on the draft directions on facilities for hedging foreign exchange risk by Residents and Non-residents issued dated February 15, 2019.

The directions aim to ease access to the domestic foreign exchange derivative markets, through:

a) merging facilities for residents and non-residents into a single unified facility for all users;

b) allowing users having valid exposures to hedge the same by using any available instrument;

c) introducing facility to hedge anticipated exposures; and

d) simplifying procedures for authorised dealers to offer foreign exchange derivatives.

The directions supersedes the existing directions in Part A, Section I and II of the Master Direction on Risk Management and Interbank Dealings issued dated January 07, 2020.

[Notification No. A.P.(DIR Series) Circular No. 29]


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