Economic Crisis in India: Task Force on Offshore Rupee Markets Submits Report to RBI Governor, Asks Extension of Foreign Exchange Market Hours
RBI and US dollar. (Photo Credit: PTI/Pixabay)

Mumbai, August 8: With the Indian economy on a declining streak and rupee losing against the US dollar for the fifth consecutive day, the Reserve Bank of India on Thursday informed that the task force on offshore rupee markets has submitted its report to the Governor Shaktikanta Das. They have recommended the extension of FX market hours and others.

According to the report - submitted by the task force - it was recommended that local foreign exchange (FX) market hours be extended and Indian banks are permitted to freely offer prices to global clients around the clock. Apart from this, the report also recommended enabling rupee derivatives settled in foreign currency to be traded in IFSC in India. Economic Crisis in India: Nirmala Sitharaman Mulling Exempting FPIs From Higher Taxes, Says Official

In the report, the task force even mentioned that FX transactions upto USD 100 million in Over-the-Counter (OTC) derivatives market be allowed without underlying exposure. Also, it recommended the setting up of a panel for aligning taxes on FX derivatives with global centres.

As per the information, there are three types of FX derivatives that are contracts to buy or sell foreign currencies at a future date. There are three major types of foreign exchange (FX) derivatives - forward contracts, futures contracts and options - which changes their attractiveness to a specific FX market participant. However, OTC derivatives are contracts that are traded (and privately negotiated) directly between two parties, without going through an exchange or another intermediary. Economic Crisis of India: SEBI Data Says Investors Lost Rs 13 Lakh Crore in 1 Month Post Union Budget 2019

It is to be known that on Thursday, the rupee ended at 70.69 against the USD tracking gains in domestic equity markets, which surged after reports of rollback of a tax surcharge on foreign portfolio investors surfaced. Union Finance Ministry official has earlier pointed out that Nirmala Sitharaman is mulling exempt investors from higher taxes and for this, the Modi government is most likely to issue a notification or an executive order soon.