RBI extends the date of implementation of Hedging of Foreign Exchange Risk till September 01, 2020

May 20, 2020 | by Avantis RegTech Legal Research Team

Industry Specific Compliance

The Reserve Bank of India (RBI) on May 18, 2020, has decided to extend the date of implementation of Hedging of Foreign Exchange Risk. RBI had 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 and were about to come into from June 01, 2020. But due to the outbreak of novel coronavirus disease (COVID-19), it has been decided that the Directions will now come into effect from September 01, 2020.

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.

[Notification No. A.P.(DIR Series) Circular No. 31]


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