NON-RESIDENT ENTITIES ALLOWED TO HEDGE CURRENCY RISK

Non-resident importers and exporters can now hedge their currency risk in respect of exports from and imports to India, invoiced in rupees. The RBI issued the guidelines for the same. This will facilitate greater use of rupee in trade transactions. According to the RBI guidelines, nonresident exporters or importers can conduct the transaction through their overseas bank (including overseas branches of AD banks I n India) or directly with AD bank in India. The products include forward foreign exchange contracts with rupee as one of the currencies and foreign currency-INR options.