 "RBI considering relaxing curbs on forex trading: Dy Guv")
**Mumbai:**The RBI may gradually relax curbs onintra-day trading limits in foreign exchange with an aim tofacilitate “genuine” hedging requirements.
In December last year, the RBI had imposed restrictionson forward trading in the local currency by FIIs and traders,and capped banks exposure to the forex market to curbexcessive volatility in the rupee.
“Within the overarching pre-requisite of facilitatinggenuine hedging needs of the customers, RBI would considerrelaxations, in particular those relating to intra-dayposition limits, in a calibrated manner at appropriate time,“RBI Deputy Governor HR Khan recently said at a conference inZurich.
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During the recent episode of excessive volatility, hesaid, “It was noticed that the flexibility given to banks forfixing their intra-day limits…were often being used forbuilding up speculative positions and taking a directional bet
on rupee.”
Khan said the measures taken by the RBI in December didachieve the intended policy objectives and also led to animmediate fall in the volumes of the markets.
The restrictions helped in stemming the slide of therupee against the dollar. It had touched an all time low of54.30 against the dollar in December.
Meanwhile, the rupee today closed marginally higher by 5paise at 51.42/43 versus the dollar on fresh dollar selling bybanks.
PTI