Cross currency trade in india

The hedging procedure for residents as laid down in A. AD Category-I banks may bring the contents of this circular to the notice of their constituents and customers concerned. Annex I to A. The Reserve Bank of India having considered necessary in public interest and to regulate the financial system of the country to its advantage, in exercise of its powers conferred by section 45W of the Reserve Bank of India Act, and of all the powers enabling it in this behalf, hereby gives the following directions to all the persons dealing in currency futures.

These Directions may be called the Currency Futures Reserve Bank Amendment Directions, and they shall come into force with effect from December 10th, All cross currency contracts shall be settled in Indian Rupees as per the method approved by Reserve Bank. Annex II to A. These directions may be called the Exchange Traded Currency Options Reserve Bank Amendment Directions, and they shall come into force with effect from December 10th, Annex III to A.

Skip to main content. The Forex market is a worldwide decentralized over-the-counter financial market for the trading of currencies. The scope of transactions in the global currency market is constantly growing, with development of international trade and abolition of currency restrictions in many nations.

The Forex market is a hour market that does not depend on certain business hours of foreign exchanges; trade takes place among banks located in different corners of the globe. Exchange rates are so flexible that significant changes happen quite frequently, which enables to make several transactions every day.

In India, forex trading is primarily an OTC Market, wherein trades are conducted between two known counterparties. There are two distinct segments of OTC foreign exchange market. Interbank market is the market between banks where dealers quote prices at the same time for both buying and selling the currency. Trades in OTC foreign exchange market are conducted either on Interbank Rate for large value transactions , or at card rate.

Forex trading is permitted in INR-related currency pairs viz. In India, OTC market is open from 9: