RBI relaxes forex hedging norms; FIEO hails move

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SME Times News Bureau | 29 Mar, 2014
Giving some relief to exporters and importers of the country, the Reserve Bank of India (RBI) has relaxed the forex hedging norms for exporters/ importers.

According to RBI notification, the central bank has revised guidelines on currency hedging for exporters and importers. Importers and exporters can cancel up to 75 percent of their hedged forex exposures, as against 25 percent earlier.

Welcoming the revised guidelines on currency hedging for exporter importers, allowing them to cancel contract upto 75 percent of their entitlement and gain or lose as the case may be, M. Rafeeque Ahmed, President, Federation of Indian Export Organisations (FIEO) said that RBI has met our demand and restored an equitable arrangement.

Amplifying it further, Ahmed said that prior to the change while exporters were asked to shell for loss, even gains were pocketed by the banks.

FIEO Chief said that he hopes that shortly this facility will be extended on 100 percent of the contract, in view of better inflow of dollars and steaming of current account deficit which may be lower than 2.5 percent of GDP.