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July 2014

A. P. (DIR Series) Circular No. 135 dated 21st May, 2014

By Gaurang Gandhi Chartered Accountant
Reading Time 1 mins
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Risk Management and Inter Bank Dealings

Presently, resident importers can book contracts to hedge the currency risk of their probable exposures, based on past performance, for an amount which is higher of the following: –
a) U p to 25% of the average of the previous three financial years’ import turnover; or
b) Previous year’s actual import turnover.

This circular has increase the limit of 25% to 50%. As a result, resident importers can book contracts to hedge the currency risk of their probable exposures, based on past performance, for an amount which is higher of the following: –
a) U p to 50% of the average of the previous three financial years’ import turnover; or
b) Previous year’s actual import turnover.

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