The Reserve Bank of India plans to allow exporters and importers to rebook and cancel up to 50 percent of their total hedged exposure from the present cap of 25 percent, Executive Director G. Padmanabhan said a in speech in Singapore on Friday.
Padmanabhan did not explain why the RBI was contemplating taking this measure. In July RBI had allowed only exporters to cancel and rebook forward contracts up to 25 percent of hedged exposure.
"We have decided in principle to relax a few things that we hope will cheer the market," Padmanabhan said in the annual conference of the Foreign Exchange Dealers' Association of India taking place in Singapore this weekend according to a copy of the speech posted in the RBI website.
"These facilitations have nothing whatsoever to do with RBI's perception about the exchange rate," he also said.
The Indian rupee dropped to a 8-1/2 month low of 56.01 to the dollar on Thursday. It was trading at 55.52 compared to its previous close of 55.59/60.