Traders and brokers can now have a higher exposure in the currency futures market. Market regulator SEBI on Tuesday doubled the gross outstanding limit to $10 million for small traders, $50 million for brokers. However, the limits for banks -- the biggest participants in the market so far -- have been left untouched at $100 million.
However, banks are still not active in the segment since they have access to the over-the-counter (OTC) forex market that is much more efficient.
The change in regulations follow repeated pleas from market particpants saying that the existing limits were inadequate to effectively hedge their foreign currency exposure risks. Traders expect the move to deepen the market, by way of higher trading volumes.
Source:-Economic Times(25-Mar-09)
However, banks are still not active in the segment since they have access to the over-the-counter (OTC) forex market that is much more efficient.
The change in regulations follow repeated pleas from market particpants saying that the existing limits were inadequate to effectively hedge their foreign currency exposure risks. Traders expect the move to deepen the market, by way of higher trading volumes.
Source:-Economic Times(25-Mar-09)
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