rediff.com

NewsApp (Free)

Read news as it happens
Download NewsApp

Available on  

Rediff News  All News 
Rediff.com  » Business » Regulators toughen rules on FX derivatives to curb Re fall

Regulators toughen rules on FX derivatives to curb Re fall

Last updated on: July 09, 2013 13:34 IST

India's regulators toughened rules for derivatives trading in the currency market in a bid to arrest the steep decline of the rupee, which fell to a record low against the dollar on Monday.

The Reserve Bank of India, in a notification issued late on Monday, banned banks from proprietary trading in domestic currency futures and the exchange-traded options market.

In a separate order, SEBI doubled the margin requirement on the domestic dollar-rupee forward trade, which means investors will now have to pay twice as much in margins for a transaction at the time of the trade itself.

SEBI also imposed fresh restrictions on open interest on USD-INR trades.

"In consultation with RBI and in view of the recent turbulent phase of extreme volatility in USD-INR exchange rate, it has been decided to curtail position limits and increase margin requirements for Currency Derivatives," the SEBI circular said.

Himank Sharma in Mumbai
Source:
© Copyright 2014 Reuters Limited. All rights reserved. Republication or redistribution of Reuters content, including by framing or similar means, is expressly prohibited without the prior written consent of Reuters. Reuters shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.