The RBI has relaxed some of the restrictions relating to hedging of currency risk of probable exposures of exporters and importers. This will give them greater operational flexibility.
Contracts booked up to 75 per cent of the eligible limit may be cancelled with the exporter/importer bearing/being entitled to the loss or gain as the case may be, the RBI said in a notification.
The eligible limit in the case of exporters is computed as the average of the previous three financial years’ (April to March) actual export turnover or the previous year’s actual export turnover, whichever is higher.
The eligible limit in the case of importers is computed as 25 per cent of the average of the previous three financial years’ actual import turnover or the previous year’s actual import turnover, whichever is higher.
Deliverable basis According to the RBI notification, the contracts in excess of 75 per cent of the eligible limit — the export/import turnover of the previous year or average of the previous three years’ turnover, whichever is higher, shall be on deliverable basis and cannot be cancelled.
Further, the profit or loss in the event of the cancellations will be borne by the exporter/importer and not passed on to the customers as was mandated earlier.
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.