Global Economy
RBI authorised dealers to maintain FX risk reserve for FX derivative contracts involving INR to hedge currency risk;
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The item describes FERR’s contract scope, 20% reserve calculation, daily cash maintenance and termination condition, but does not specify an effective date.
News detail
Foreign Exchange Risk Reserve (FERR) will be applicable to all FX derivative contracts involving INR where authorised dealer is purchasing foreign currency against INR. Shall be equal to 20% of INR equivalent of notional amount of each derivative contract. To be deposited and maintained via cash in India with RBIA on daily basis; be maintained until termination of contract.
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