New Rules: RBI had issued a circular in this regard on January 5, which were to come into effect from April 5. But these will now be implemented from 3 May 2024.
RBI has said in the new circular issued on April 4, 2024 that the new rules will come into effect from May 3. It has been said that for currency contracts to be made in rupees on National Stock Exchange (NSE) and Bombay Stock Exchange (BSE), it is necessary to have currency exposure. For positions up to $100 million, traders do not have to provide proof of such exposure, but it is necessary to provide information about the exposure.
What is the matter
Under the new rule, traders with investments of more than $100 million will have to appoint a custodian participant or authorized dealer.
According to RBI rules, if a user’s investment is very high, due to which he wants to trade more than 100 million dollars in currency pairs, then under the new rule, he will have to trade through an authorized dealer or custodian.
The exchange will have to provide this facility to the user. According to the news of various sources, Many traders bet on currency derivatives only to earn profit. Due to this, the daily volume of currency derivatives increased to 5 billion dollars.
When currency futures trading began in August 2008, the RBI allowed transactions in dollar/rupee currency futures to hedge foreign exchange rate risks.
Traders say that there are only hedgers in the market and not speculators. If there are no risk takers then there will be no benefit in coming into the market. If both of these are not available in any market then it becomes difficult to decide the price.
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