RBI eases norms for foreign investors

RBI eases norms for foreign investors

 To enhance the depth of the foreign exchange market, the Reserve Bank today allowed foreign investors to participate in the domestic exchange-traded currency derivatives, a segment where volumes have declined.

"With a view to improving the depth and liquidity in the domestic foreign exchange market, it has been decided to allow foreign portfolio investors to participate in the domestic exchange-traded currency derivatives market to the extent of their underlying exposures plus an additional $ 10 million," the Reserve Bank of India said in its Second Bi-Monthly Monetary Policy Statement.

"It has also been decided to allow domestic entities similar access to the exchange-traded currency derivatives market," it said. The RBIhad in July last year imposed curbs such as doubling of margin requirement and a ceiling on position limits on exchange-traded currency derivatives.

The restrictions were imposed to check speculation in the foreign-exchange market.