RBI issues consolidated guidelines on unhedged foreign currency exposure

Corporate Laws

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Dec 09, 2022 

The Reserve Bank on Tuesday modified and consolidated guidelines for banks on unhedged foreign currency exposures of any entity to prevent losses due to heightened volatility in the forex market.The RBI has, from time to time, issued several guidelines, instructions and directives to the banks on Unhedged Foreign Currency Exposure (UFCE) of the entities, which have borrowed from banks.

In the wake of a bank seeking clarification on various aspects related to UFCE, the RBI said a comprehensive review of the extant guidelines has been undertaken and all the existing instructions on the subject have been consolidated.These instructions shall come into force from January 1, 2023, it said in a circular.

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