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The Reserve Bank of India (RBI) has raised currency derivative trade limit to __________ amount for residents and foreign portfolio investors?
  • a)
    $150 million
  • b)
    $200 million
  • c)
    $50 million
  • d)
    $100 million
Correct answer is option 'D'. Can you explain this answer?
Verified Answer
The Reserve Bank of India (RBI) has raised currency derivative trade l...
The Reserve Bank of India (RBI) has raised exposure limit under Exchange Traded Currency Derivatives (ETCD) trading for residents and foreign portfolio investors (FPIs) to $100 million across all currency pairs involving the Indian rupee. The RBI's decision to raise the limit will help entities engaged in forex transactions to maintain their currency risks in a better manner. The ETCD is a financial instrument that trades on a regulated exchange, and whose value is based on the value of another asset. These are derivatives that are traded in a regulated fashion. These derivatives can be used to hedge exposure or speculate on a wide range of financial assets like commodities, equities, currencies, and even interest rates. Earlier, the RBI had imposed a limit of $15 million for USD-INR and $5 million for other currency pairs of Indian rupee with Euro, Japanese Yen and British Pound.
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The Reserve Bank of India (RBI) has raised currency derivative trade limit to __________ amount for residents and foreign portfolio investors?a)$150 millionb)$200 millionc)$50 milliond)$100 millionCorrect answer is option 'D'. Can you explain this answer?
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