Limit on importers' forward contracts up

The Reserve Bank of India (RBI) on Tuesday allowed importers to book forward contracts, under the past performance route, up to 50 per cent of the eligible limit. Earlier this limit was set at 25 per cent. RBI also said that importers who have already booked contracts up to previous limit of 25 per cent in the current financial year, shall be eligible for difference arising out of the enhanced limits.

This is yet another step taken in the past when the rupee was depreciating against the dollar. The eligible limit is computed as the average of the previous three financial years’ import turnover or the previous year’s actual import turnover, whichever is higher.  Recently RBI also lifted certain curbs on gold imports.