The Reserve Bank of India (RBI) on Thursday reiterated that its stance on the regulatory framework for Exchange Traded Currency Derivatives (ETCD) had remained constant through the years and careworn that there can be no change in its coverage method.
However, following suggestions from members and up to date developments, the RBI mentioned it was deferring the implementation of forex spinoff laws to May 3, from the sooner stipulated date of April 5.
Stating that within the latest interval some considerations had been expressed about participation within the ETCD market within the gentle of the round issued on January 5, the RBI mentioned the round had set out the Master Direction and reiterated the regulatory framework for participation in ETCDs involving the rupee with none change.
“As hitherto, participants with a valid underlying contracted exposure can continue to enter into ETCDs involving the Indian Rupee up to a limit of $100 million without having to produce documentary evidence of the underlying exposure,” the RBI mentioned.
The RBI is emphasising the norm relating to ‘underlying contracted exposure’ to curb the potential for speculative buying and selling in forex derivatives.
