RBI's New Forex Reserve Rules Raise FCNR(B) Deposit Hedging Costs For Banks
Indian banks face rising costs for hedging dollar interest payments on foreign currency non-resident bank (FCNR(B)) deposits following new foreign exchange regulations introduced by the Reserve Bank of India (RBI). Under the Foreign Exchange Risk Reserve (FERR) framework, lenders must maintain cash reserves equivalent to 20% of the rupee value of eligible foreign exchange derivative contracts. As…
We haven't written up this one. Free Press Journal has the full story — the link below goes straight to it.
