Foreign exchange risk management: RBI permits specified hedging and derivative dealings under exposure verification and reporting obligations. Consolidates RBI directions under FEMA permitting authorised dealers to enter forward contracts and specified derivatives with residents, FIIs, NRIs and overseas parties subject to documentary verification, RBI conditions on cancellation/rebooking, board-approved risk policies, and prior approvals where required. Authorised dealers and banks may hedge asset-liability mismatches using interest rate/currency swaps, forward rate agreements and options subject to matching of value and maturity, marking-to-market, and approved limits. Detailed reporting and exposure-limit methodologies for net open positions, nostro/vostro balances and cross-currency derivatives are mandated to Reserve Bank.
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Foreign exchange risk management: RBI permits specified hedging and derivative dealings under exposure verification and reporting obligations.
Consolidates RBI directions under FEMA permitting authorised dealers to enter forward contracts and specified derivatives with residents, FIIs, NRIs and overseas parties subject to documentary verification, RBI conditions on cancellation/rebooking, board-approved risk policies, and prior approvals where required. Authorised dealers and banks may hedge asset-liability mismatches using interest rate/currency swaps, forward rate agreements and options subject to matching of value and maturity, marking-to-market, and approved limits. Detailed reporting and exposure-limit methodologies for net open positions, nostro/vostro balances and cross-currency derivatives are mandated to Reserve Bank.
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