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RBI Eases Norms On FX Earnings, Forward Contracts

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The Reserve Bank of India on 31 July allowed companies to keep 100 per cent of their foreign exchange earnings in a bid to provide them with more flexibility to manage their exposure.

The guidelines reverse the RBI's May directive mandating exporters to convert 50 percent of their foreign exchange holdings in their accounts into rupees within two weeks, which had been intended to stem falls in the local currency during that period.

The RBI will also allow exporters to cancel and rebook forward contracts comprising up to 25 per cent of their total hedged exposure.

(Reuters)


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