What is RBI's new rule for FX derivatives?

WHAT IS RBI's NEW RULE FOR FX DERIVATIVES?

RBI has made a big change to the forex derivatives market. This is expected to cut down on speculation and make the rupee more stable. Written by - Prathyush Gupta Designed by- Prince Kumar

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[{"selector":"#anim-60aa022b-3def-421f-8e52-bace9f8541cf","keyframes":{"opacity":[0,1]},"delay":0,"duration":600,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] [{"selector":"#anim-134c8a09-d08e-4942-a972-edd8627f204e","keyframes":{"transform":["translate3d(106.37119%, 0px, 0)","translate3d(0px, 0px, 0)"]},"delay":0,"duration":600,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] [{"selector":"#anim-608cd098-8891-441b-8ea5-a4b92334e670","keyframes":{"opacity":[0,1]},"delay":0,"duration":600,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] [{"selector":"#anim-4d8c8ff9-6346-460a-8779-616ec4688f99","keyframes":{"transform":["translate3d(-128.99999%, 0px, 0)","translate3d(0px, 0px, 0)"]},"delay":0,"duration":600,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] These contracts are typically traded on exchanges. Photo Credit: Pexels

[{"selector":"#anim-b1d1ab94-4048-4369-a703-43ce5b738387","keyframes":{"opacity":[0,1]},"delay":0,"duration":600,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] [{"selector":"#anim-0ce3ca88-be82-4535-a3da-de21df240608","keyframes":{"transform":["translate3d(106.37119%, 0px, 0)","translate3d(0px, 0px, 0)"]},"delay":0,"duration":600,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] [{"selector":"#anim-5364fc9f-87aa-438e-848c-8f8f46133faf","keyframes":{"opacity":[0,1]},"delay":0,"duration":600,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] [{"selector":"#anim-3a2d3ebb-f49d-4140-ab49-0e435779502b","keyframes":{"transform":["translate3d(-128.99999%, 0px, 0)","translate3d(0px, 0px, 0)"]},"delay":0,"duration":600,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] Starting from May 3, RBI's new rule will require that only people with a real need to exchange currencies will be allowed to trade in these markets. Photo Credit: Pexels

[{"selector":"#anim-7588ac51-ad72-4047-9de1-37b53a673d67","keyframes":{"opacity":[0,1]},"delay":0,"duration":600,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] [{"selector":"#anim-e6a57284-0b49-4094-a7d6-29e44216da78","keyframes":{"transform":["translate3d(106.37119%, 0px, 0)","translate3d(0px, 0px, 0)"]},"delay":0,"duration":600,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] [{"selector":"#anim-19af79ed-a495-46ad-ad6d-a1d6b756c929","keyframes":{"opacity":[0,1]},"delay":0,"duration":600,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] [{"selector":"#anim-29a959c4-356d-47c4-8a65-2e28c044d409","keyframes":{"transform":["translate3d(-128.99999%, 0px, 0)","translate3d(0px, 0px, 0)"]},"delay":0,"duration":600,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] This is expected to cut down on speculation and make the rupee more stable. Photo Credit: Pexels

[{"selector":"#anim-124a24b2-ab32-40e3-a717-165fe60ec8fe","keyframes":{"opacity":[0,1]},"delay":0,"duration":600,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] [{"selector":"#anim-a3dd6e24-7eef-4d18-9fda-38ce60360e9d","keyframes":{"transform":["translate3d(106.37119%, 0px, 0)","translate3d(0px, 0px, 0)"]},"delay":0,"duration":600,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] [{"selector":"#anim-03423781-b2d2-4ef5-80f6-db86b4f5eb5c","keyframes":{"opacity":[0,1]},"delay":0,"duration":600,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] [{"selector":"#anim-726ffd43-1671-442f-b978-c4c589368344","keyframes":{"transform":["translate3d(-128.99999%, 0px, 0)","translate3d(0px, 0px, 0)"]},"delay":0,"duration":600,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] However, it could also lead to a decrease in liquidity in the market. Photo Credit: Pexels

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[{"selector":"#anim-4c823a5e-efef-4f3e-b996-90ff1baa148f","keyframes":{"opacity":[0,1]},"delay":0,"duration":600,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] [{"selector":"#anim-32ae8ca9-81e6-4235-a5eb-3c4c31ce131e","keyframes":{"transform":["translate3d(106.37119%, 0px, 0)","translate3d(0px, 0px, 0)"]},"delay":0,"duration":600,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] [{"selector":"#anim-17b89f09-e0d4-4ac3-b1a4-a3e3e88423a5","keyframes":{"opacity":[0,1]},"delay":0,"duration":600,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] [{"selector":"#anim-52024880-b5ea-447e-83a8-846be8a82b0d","keyframes":{"transform":["translate3d(-128.99999%, 0px, 0)","translate3d(0px, 0px, 0)"]},"delay":0,"duration":600,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] Overall, the RBI's new rule is a significant change to the forex derivatives market in India. Photo Credit: RBI

[{"selector":"#anim-bc897aa6-0d83-4277-95e9-6db12f464047","keyframes":{"opacity":[0,1]},"delay":0,"duration":600,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] [{"selector":"#anim-ee43b3fa-1854-4427-b771-6b70d0f08276","keyframes":{"transform":["translate3d(106.37119%, 0px, 0)","translate3d(0px, 0px, 0)"]},"delay":0,"duration":600,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] [{"selector":"#anim-19d2e44a-de2b-42fe-9fb8-53599c5d4399","keyframes":{"opacity":[0,1]},"delay":0,"duration":600,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] [{"selector":"#anim-3af01f23-04fc-4490-b277-c5febedcfd01","keyframes":{"transform":["translate3d(-128.99999%, 0px, 0)","translate3d(0px, 0px, 0)"]},"delay":0,"duration":600,"easing":"cubic-bezier(0.2, 0.6, 0.0, 1)","fill":"both"}] It remains to be seen what the long-term impact of this change will be. Learn More