The term balance of payments (BOP) imply that the balance of all financial exchanges between one country and another country of the rest of the world, made up of the current account (visible and invisible trade) and capital account (capital movement) and financial transfers excluding Central Bank’s reserve. If the inward supply of funds such…
Asian Clearing Union (ACU) was established in 1975, after at the initiative of the United Nations Economic and Social Commission for Asia and the Pacific (ESCAP). The central banks and monetary authorities of India, Islamic Republic of Iran, Nepal, Pakistan and Sri Lanka Bangladesh, Myanmar, Bhutan and Maldives are the current participants in the ACU…
In consultation with Government of India, the Reserve Bank of India liberaised some aspects of ECB policy including policy on Rupee Denominated Bonds (RDB). According to review of the policy, the eligible borrower companies in manufacturing sector can raise Extranal Commercial Borrowings up to USD 50 million or its equivalent with minimum average maturity period…
All the AD category-I branches are now required to upload transaction-wise information (LRS data) of resident individuals to RBI on daily basis. According to RBI circular A.P. (DIR Series) Circular No. 23 dated April 12, 2018, all AD-I category branches are required to report remittances made under LRS scheme on a daily basis which…
Hitherto, the persons resident in India and Foreign Portfolio Investors (FPIs) are allowed to take a long (bought) or short (sold) position in USD-INR upto USD 15 million per exchange without having to establish existence of underlying exposure. In addition, residents & FPIs are allowed to take long or short positions in EUR-INR, GBP-INR and…
The notified entities in India are permitted to import of Gold only after the issue of license by DGFT. The imported gold covered by the above license shall be disposed-off in the manner specified by the DGFT. The conditions for the licence are clearly mentioned in the licence itself. Within the contours of the Regulations…
Where exports made under the Duty Drawback Scheme and such bill remain outstanding beyond the prescribed time limit, the exporter needs to submit a negative statement/certificate to the nodal officer of Department of Excise and Customs on a 6 monthly basis. The negative statement /certificate will be issued either by the authorized dealer (AD) bank(s)…
A forward contract is an agreement between two parties to buy or to sell an asset at a specified price on a future date. For example, in foreign exchange market ‘forward contract’ means an exchange agreement between two parties to deliver one currency in exchange for another currency at a forward or future date. Futures…
In a layman’s language, derivative means profit or loss derived from something. The most common derivative instruments used in financial markets are the forward contract, options, forward rate agreement, futures contract, interest rate swaps etc. The characteristic and value of these derivative instruments are derived from underlying assets like currencies, Interest rates, stocks indices, precious…
LIBOR is the acronym for London Interbank Offered Rate. The ‘LIBOR’ serves as the key benchmark rate in calculating interest rates on various loans across the world. Each morning before 11 a.m. (GMT), the sets of major banks that have a significant presence in the London market are asked the rate at which they could…