Reserve Bank of India eases currency hedging norms for FIIs

Reserve Bank of India (RBI) eases currency hedging norms for Foreign Institutional Investors (FIIs).

The Reserve Bank of India (RBI) has allowed Foreign Institutional Investors (FIIs) to approach any bank to hedge the currency risk on their stock market investments by easing norms for foreign investors.

Earlier, only banks maintaining accounts (or designated bank) of FIIs were allowed to act as market makers to FIIs for hedging their currency risk on the market value.

In a notification the Reserve Bank of India said “It has now been decided to allow FIIs to approach any bank for hedging their currency risk on the market value of entire investment in equity and/or debt in India”.

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