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For more operational flexibility in the external sector, the Reserve Bank of India has allowed rebooking and cancellation without restriction of forward contracts in all current and capital account transactions up to one year.
Senor treasury executives said the decision was partly an unwinding of restrictions regulator clamped after the rupee began sliding, some months earlier. It was also to encourage inflow of dollars to the strengthen rupee before the effect of the US Federal Reserve's tapering of its bond buying programme set in.
On exposure of foreign institutional investors, qualified financial investors and other portfolio investors, forward contracts booked by these, once cancelled, can be rebooked up to 10 per cent of the value, it said. Rolling over would be allowed on or before maturity.
As present, exporters are allowed to cancel and rebook forward contracts to the extent of 50 per cent of booking in a financial year for hedging contracted export exposures. Importers are allowed to cancel and rebook these to the extent of 25 per cent of what is booked in a financial year, for hedging their exposure.
