In its first bi-monthly policy, the RBI, in order to enhance hedging facilities for foreign investors in debt instruments, proposed to allow them to hedge the coupon receipts falling due during the next 12 months.
"This is determined by improving the hedging environment for foreign investors in India. It is not necessarily to combat the NDF market but primarily to improve the (hedging) environment in the country," the RBI Governor Raghuram Rajan told reporters at the customary post policy meeting with the media.
The central bank also said it is in final discussion with market regulator, Sebi, to finalise the modalities for allowing FIIs to hedge their currency risk by using exchange traded currency futures in the domestic exchanges.
The RBI also proposed to allow all resident individuals, firms and companies with actual foreign exchange exposures to book foreign exchange derivative contracts up to $2,50,000
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