Khan: Points to ponder
New Delhi, Oct. 7 (PTI): The Reserve Bank today said it would look to ease restrictions on the forex futures market once stability improved in the foreign exchange market.
“Once the stability improves in the forex market, we will look at the whole gamut of futures market,” RBI deputy governor H. R. Khan said on the sidelines of an event here.
During the morning session, the rupee fell 21 paise to 61.65 against the dollar because of demand from importers for the US currency.
The local currency had hit an all-time low of 68.85 against the dollar on August 28.
“As things stabilise, we will look at more and more relaxations. For examples, in OTC (over-the-counter) market, there is requirement of documentation for the underlying. For up to certain small values, we may think that the documentation requirement (such cases) can be done away with,” he said.
Khan said the RBI was in talks with the Securities and Exchange Board of India (Sebi) on making the dollar-rupee OTC and futures market trades possibly on a delivery basis.
“Going forward, the best idea is to harmonise both the OTC and futures market, both can possibly be delivery-based. We are in talks with Sebi and going forward will look at this,” Khan said.
On how long the dollar window for oil firms will continue, Khan said, “We have said November 30 or before that. We will take a call.”
In August, the RBI had opened a special window to help the three state-owned oil marketing companies needing about $8.5 billion every month to meet their foreign exchange requirement in a bid to check the rupee’s free fall.
The PSU oil firms are the biggest buyers of dollars, requiring $8-$8.5 billion every month for the import of an average 7.5 million tonnes of crude oil.
The RBI decision is aimed at curbing volatility in the forex market. Under the swap facility, it “sells/buys dollar-rupee forex swaps for fixed tenor with the oil marketing companies through a designated bank.”