Limits on forward deals hiked

New Delhi: The Reserve Bank of India (RBI) has hiked the limits on forward contracts that can be booked by importers and exporters on the basis of a declaration of exposures based on past performance. The apex bank has also lifted the $100-million cap on such contracts.

In a circular to all authorised dealers in foreign exchange, RBI has said, henceforth, forward contracts booked can stand up to 50 per cent of the eligible limit "without any cap."

This can be done provided any amount in excess of 25 per cent of the eligible limit shall be only on a deliverable basis. This limit is the average of the past three years' import or export turnover or the past year's turnover, whichever was higher, the RBI has said.