INDIA: Revised Position Limits for Foreign Portfolio Investors in Currency Derivatives

Tuesday March 31 2015

The Reserve Bank of India has published a circular setting out revised India foreign investment limits in currency derivatives.

Under the current rules, Foreign Portfolio Investors (FPIs) can take position – both long (bought) as well as short (sold) – in foreign currency up to USD 10 million or equivalent per exchange.

As a measure of further liberalisation, it has now been decided to increase the limit (long as well as short) for FPIs in USD-INR pair up to USD 15 million per exchange. In addition, FPIs shall be allowed to take long (bought) as well as short (sold) positions in EUR-INR, GBP-INR and JPY-INR pairs, all put together, up to USD 5 million equivalent per exchange. These limits shall be monitored by the exchanges and breaches, if any, may be reported. For the convenience of monitoring, exchanges may prescribe fixed limits for the contracts in currencies other than USD such that these limits are within the equivalent of USD 5 million.

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