RBI may raise the limit of hedge exposure for exporters and importers

The Reserve Bank of India, Executive Director G. Padmanabhan said a in speech in Singapore that, "RBI plans to allow exporters and importers to rebook and cancel up to 50 per cent of their total hedged exposure from the present cap of 25 per cent."

Mr. Padmanabhan did not explain why the RBI was contemplating taking this measure. Currently RBI allows only exporters to cancel and rebook forward contracts up to 25 per cent of hedged exposure.

According to a copy of the speech posted in the RBI website Mr. Padmanabhan, said in an annual conference of the Foreign Exchange Dealers' Association of India in Singapore that, "RBI have decided in principle to relax a few things that we hope will cheer the market. These facilitations have nothing whatsoever to do with RBI's perception about the exchange rate."