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Learn MoreComprehensive Guidelines on Over the Counter (OTC) Foreign Exchange Derivatives – Cost Reduction Structures
Presently, use of cost reduction structures, i.e., cross currency option cost reduction structures and foreign currency – INR option cost reduction structures, is permitted only to hedge exchange rate risk arising out of trade transactions and the External Commercial Borrowings (ECB).
This circular permits the use of cost reduction structures, additionally, for hedging the exchange rate risk arising out of foreign currency loans availed of domestically against FCNR (B) deposits.