RBI Allows Non-Residents to Participate In Rupee Interest Rate Derivatives Market

  • On 29th March, 2019, the RBI allowed non-residents to participate in the rupee interest rate derivatives market.
  • This decision would deepen the rupee interest rate swap (IRS) market.
  • Foreign portfolio investors, collectively, can transact in interest rate futures up to a limit of net long position of Rs 5,000 crore.
  • 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 there under.

Reasonsbehindthe RBI’s Move

  • Increasing NRI Participation:There is an active market for rupee ....
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