The Reserve Bank of India issued A.P. (DIR Series) Circular No. 25 and A.P. (DIR Series) Circular No. 26 on October 10, 2026, to tighten controls and manage risk in the foreign exchange mark.
These are very important regulatory measures announced by the Reserve Bank of India (RBI) on October 10, 2026, concerning Foreign Exchange (FX) derivative transactions involving Indian Rupee, effective immediately, aimed at strengthening market discipline and ensuring orderly functioning of the foreign exchange market.
The key changes include restrictions on rebooking cancelled FX derivative contracts, a reduction in the threshold for undertaking certain derivative transactions without establishing the underlying exposure, from $100million to $5 million and the introduction of a Foreign Exchange Risk Reserve (FERR) for specified transactions.
Dealers must secure signed declarations confirming exposures are not redundantly hedged elsewhere.
