The Reserve Bank of India (RBI) has decided to relax norms forexporters. “The facility of rebooking of cancelled contracts is being increased from the present limit of 25 per cent to 50 per cent and made symmetrical for both exporters and importers,” said RBI executive director G Padmanabhan at the 8th Annual Conference of the Foreign Exchange Dealers’ Association of India held in Singapore.

Also, the documentation for booking forward contracts up to $200,000 is also being simplified. “Let me hasten to add that these facilitations have nothing whatsoever to do with RBI’s perception about the exchange rate as some of practitioners had reportedly believed or stated when we relaxed the restriction on net open position limits of banks,” said Padmanabhan.

RBI had imposed a host of restrictions on both banks as well as corporates in December 2011 and subsequently in 2012 that were considered necessary for curbing their speculative behaviour. As the situation improved, many of these restrictions have been either relaxed partially or removed, said Padmanabhan.

However, according to Padmanabhan the restriction about positions undertaken by the banks in the exchanges cannot be netted/offset by undertaking positions in the over-the-counter (OTC) market and vice-versa. And the restriction about positions initiated in the exchanges have to be liquidated/closed in the exchanges only remains.

“RBI has been constantly monitoring the developments in both the OTC and exchange-traded markets closely and we continue to believe that there has to be a level-playing field between both these markets,” he said. Amid the rupee touching nearly nine-month low against the dollar, Padmanabhan said RBI will continue to manage the exchange rates as hitherto, targeting on curbing excessive volatility rather than any specific levels. (Business Standard)