Directions on Hedging of Foreign Exchange Risk by Residents and Non-Residents to be Implemented only from 1 Sept 2020 and not from 1 June 2020

[RBI/2019-20/232 - A.P.(DIR Series) Circular No.31 dated May 18, 2020]

Sub: Risk Management and Inter-bank Dealings Hedging of Foreign Exchange Risk-Date of Implementation

A reference is invited to the Directions on Hedging of Foreign Exchange Risk issued vide A.P. (DIR Series) Circular No. 29 dated April 7, 2020. The Directions were to come into effect from June 1, 2020.

2. Based on the requests received from market participants and in the context of the difficulties arising from the outbreak of novel coronavirus disease (COVID-19), it has been decided that the Directions will now come into effect from September 1, 2020.

3. Directions on the participation of Banks in Offshore Non-deliverable Rupee Derivative Markets issued vide A.P. (DIR Series) Circular No. 23 dated March 27, 2020 will come into effect from June 1, 2020, as hitherto.

4. The Directions contained in this circular have been issued under Sections 10(4) and 11(1) of the Foreign Exchange Management Act, 1999 (42 of 1999) and are without prejudice to permissions/ approvals, if any, required under any other law.