RBI ALLOWS COMMODITY HEDGING IN GLOBAL MARKET
The Reserve Bank of India (RBI) has allowed local firms producing or using aluminium, copper, lead, nickel and zinc to minimize risk due to price fluctuations by taking cover on international commodity exchanges. Hedging may be permitted up to the average of previous three financial years’ actual purchases/sales or the previous year’s actual purchases/sales turnover, whichever is higher. It also asked authorised dealer banks to release money only in cases of standard exchange traded futures and options. RBI also allowed hedging of funds in global markets by actual users of ATF to help the domestic aviation industry take advantage of global developments in the market.