13h ago
RBI loosens banks’ forex exposure framework, expanding room for trading
The Reserve Bank of India revised how banks calculate and report foreign-exchange exposure by ending separate onshore and offshore net open position calculations. Banks may include accumulated surpluses from overseas operations in their net open position, while forex risk capital charges must be held against the actual net open position. The RBI also clarified that eligible structural foreign-currency investments, such as capital investments and certain unremitted overseas earnings, can be excluded from net open position calculations. Gold positions will be measured separately, a change aimed at internal risk management and capital use rather than altering gold spot or futures market dynamics.