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The RBI, on Wednesday, said non-residents can undertake transactions in the rupee interest rate derivatives markets to hedge an exposure to rupee interest rate risk and for purposes other than hedging.
According to the central bank, a non-resident may undertake rupee interest rate derivative transactions in India to hedge its interest rate risk using any permitted product transacted on recognised stock exchanges, electronic trading platforms (ETPs) or over the counter (OTC) markets.
A non-resident has to ensure that its interest rate derivative transactions conform to the relevant provisions of the RBI Act, 1934, as well as applicable provisions of Foreign Exchange Management Act, 1999, and the rules, regulations and directions issued thereunder.
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