Banking News

Revision of position (long or short) for all currencies in  Exchange Traded Currency Derivatives (ETCD) Market

Revision of position (long or short) for all currencies in Exchange Traded Currency Derivatives (ETCD) Market


Hitherto, the persons resident in India and Foreign Portfolio Investors (FPIs) are allowed to take a long (bought) or short (sold) position in USD-INR upto USD 15 million per exchange without having to establish existence of underlying exposure. In addition, residents & FPIs are allowed to take long or short positions in EUR-INR, GBP-INR and JPY-INR pairs, all put together, upto USD 5 million equivalent per exchange without having to establish existence of any underlying exposure.

RBI has now permitted persons resident in India and FPIs to take positions (long or short), without having to establish existence of underlying exposure, upto a single limit of USD 100 million equivalent across all currency pairs involving INR, put together, and combined across all exchanges.

The Banking regulator informed in their circular that the onus of complying with the provisions of new guidelines rests with the participant in the ETCD market and in case of any contravention the participant shall be liable to any action that may be warranted as per the provisions of Foreign Exchange Management Act, 1999 and the regulations, directions, etc. issued thereunder.
The communique also mentioned that these limits shall also be monitored by the exchanges, and breaches, if any, may be reported to the Reserve Bank of India.

All other operational guidelines, terms and conditions mentioned in  A.P. (DIR Series) Circular Nos.90 & 91 dated March 31, 2015 relating to participation of a Foreign Portfolio Investor (FPI) in the ETCD market remains unchanged.

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