RBI expects currency futures to become operational by this fiscal

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Mumbai, Apr 29 (UNI) Currency futures will be traded in eligible exchanges in the country during the current fiscal, RBI Governor Y V Gopala Reddy today indicated.

Talking to newsmen after declaring the Annual policy statement of Central bank for 2008-09, Dr Reddy said the broad framework drafted in consultation with securities and exchanges, Board of India was expected to be finalised by the end of May.

A report on currency futures had been finalised and placed on RBI website yesterday, after expert opinion were received. An RBI-SEBI standing technical committee had been set up to advise on operational aspects in regard to trading of currency futures on exchanges.

On other liberalisation measures of foreign exchange market, the RBI had announced facilitation of domestic crude oil refining companies to hedge their commodity price risk exposures. Domestic crude oil refining companies would be permitted to hedge their commodity price risk on domestic purchase of crude oil and sale of petroleum products on the basis of underlying contracts which are linked to international prices on overseas exchanges or markets.

These companies could also hedge their commodity price risk on oil imports in overseas exchanges and markets on the basis of their past performance upto 50 per cent of actual imports volume during the previous year or 50 per cent of the average volume of importers during the previous three financial years, which ever is higher. The Companies would have to ensure regularisation of the contracts booked under this facility by production of supporting import orders during the currency of the hedge.

RBI also announced that Indian companies could invest in overseas in energy and natural resources sectors, such as oil, gas, coal and mineral ores in excess of the current limits with its prior approval.

The Central bank also liberalised the period for realisation and repatriation of export proceeds from six months to one year for exporters of goods or software in units of special economic zones.

The full value of goods or software exported could benefit from the extension subject to review after one year. The benefit was currently being enjoyed by 100 per cent export oriented units and unit set up under Electronic Hardware Technology Parks, Software Technology Parks and Biotechnology parks.


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