RBI to relax norms for forex futures after rupee stabilises

The Reserve Bank of India (RBI) has said it will look at easing restrictions on the forex futures market once stability improves in the foreign exchange market.

The local currency had hit an all time low of 68.85 against the dollar on August 28.

"Once the stability improves in forex market, we will look at the whole gamut of futures market," RBI Deputy Governor HR Khan said on the sidelines of an event in the national capital.

During the morning session on Monday, the rupee fell by 21 paise to 61.65 against the dollar due to demand from importers for the US currency.

"As things stabilise, we will look at more and more relaxations. For examples, in OTC (Over-the-Counter) market, there is requirement of documentations for the underlying. For up to certain small values, we may think that documentation requirement (such cases) can be done away with," he said.

Khan said RBI is in talks with Securities and Exchange Board of India (Sebi) on making the dollar-rupee OTC and futures market trades possibly on a delivery basis.

"Going forward, the best idea is to harmonise both OTC and futures market, both can possibly be delivery-based. We are in discussion with Sebi and going forward will look at this," Khan added.