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JNANA VARDHINI
SIBSTC MONTHLY NEWSLETTER -COVERING
CONTEMPORARY BANKING RELATED TOPICS
8th Issue
MARCH- 2011
SOUTHERN INDIA BANKS’ STAFF
TRAINING COLLEGE
No.531, Faiz Avenue, 11th Main, 32nd Cross
IV Block, Jayanagar, BANGALORE-560 011
1
CURRENCY FUTURES
What Does Currency Futures Mean?
A transferable futures contract that specifies the price at which a currency can be bought
or sold at a future date. Currency future contracts facilitate hedging of currency exposures
and these are traded at the floor of organized exchanges. In future contracts the quantum
of currency, the price and the delivery date all get pre-determined.
Currency Futures- Need and advantages
Any transaction denominated in a currency other than the home currency is a foreign
exchange transaction and hence it is subject to exchange risk and to hedge this risk
several hedging instruments are now available in the market. Amongst the various
derivative products available, currency futures are now being increasingly used by
Corporates and Financial Institutions to hedge their underlying currency exposures in
foreign exchange transactions.
Currency Futures have emerged as the preferred tool in view of the following advantages
1. Currency futures contracts are marked-to-market daily. Investors can exit their
obligation to buy or sell the currency prior to the contract's delivery date. This is
done by closing out the position.
2. In currency futures, the price is pre-determined when the contract is signed, just in
the case of forward contracts. Depending on the views taken and the market
trends, the hedger can minimize the loss by closing the position even well before
the due date as the contracts are tradable in nature.
3. However, most participants in the futures markets are speculators who usually
close out their positions before the date of settlement, so most contracts do not
tend to last until the date of delivery
4. The counter party risk is nil in respect of Currency Futures as these products are
at the floors of organized future exchanges which are well regulated and
settlement process well monitored by clearing houses.
Comparison between Currency Futures and Forward Contracts are:
Characteristics
Size of the contract
Maturity
Location
Currency Futures
Standardized
as
per
exchange guidelines
Fixed and longest being one
year
At the floor of an organized
exchange
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Forward Contracts
Any size acceptable
Any maturity and normally
up to one year
OTC product normally at
the counters of a Bank
Pricing
Margin/Collateral
Settlement
Trading hours
Counter party
Liquidity
Outcry process
exchange floor
on
the Prices
determined
by
market forces based on bid
and offer quotes
Initial margin as per No explicit margin. But an
exchange guidelines and agreement and customerdifferentials collected on Bank relationship shall be
marked to market basis
essential
Rarely delivered upon. Normally delivery takes
Settlement normally by place or offsetting is also
cash or by offsetting the possible subject to payment
position
of differentials
During exchange hours
Through Banks network or
through
common
monitors/screens
like
Reuters
Unknown to each other due Counter party risk prevails
to auction type trading.
But counter party risk nil as
regulated well by exchanges
Highly liquid and large Liquid and relatively higher
volumes are now traded
volumes are transacted
Developments in India
In India though liberalization under FEMA triggered a quantum jump in the volume of
business in foreign exchange markets, extensive fluctuations in exchange rates also
started taking place causing a concern to those who have genuine exposures in foreign
exchange as volatility in exchange rates started creating dents in profits. This situation
resulted in attracting the attention of policy makers, investors, importers, exporters and
borrowers.
The following developments led to an orderly growth of markets for currency futures in
India.
 The Reserve Bank of India issued a set of directions and guidelines for the launch
of the much-awaited currency futures trading in India.
 Following are the guidelines issued under the Reserve Bank of India Act, 1934
that have come into force with effect from August 6, 2008.
Definitions
Currency Futures means a standardised foreign exchange derivative contract
traded on a recognized stock exchange to buy or sell one currency against another
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on a specified future date, at a price specified on the date of contract, but does not
include a forward contract.
Currency Futures market means the market in which currency futures are traded.
Permission
(i)
Currency futures are permitted in US Dollar - Indian Rupee or any other
currency pairs, as may be approved by the Reserve Bank from time to
time.
(ii)
Only ‘persons resident in India’ may purchase or sell currency futures to
hedge an exposure to foreign exchange rate risk or otherwise.
Features of Currency Futures
Standardized
currency
futures
shall
have
the
following
features:
a.
Only USD-INR contracts are allowed to be traded.
b.
The size of each contract shall be USD 1000.
c.
The contracts shall be quoted and settled in Indian Rupees.
d.
The maturity of the contracts shall not exceed 12 months.
e.
The settlement price shall be the Reserve Bank’s Reference Rate on
the last trading day.
Participants
(i)
No person other than 'a person resident in India' as defined in section 2(v)
of the Foreign Exchange Management Act, 1999 (Act 42 of 1999) shall
participate in the currency futures market.
(ii)
Notwithstanding sub-paragraph (i), no scheduled bank or such other
agency falling under the regulatory purview of the Reserve Bank under the
Reserve Bank of India Act, 1934, the Banking Regulation Act, 1949 or
any other Act or instrument having the force of law shall participate in the
currency futures market without the permission from the respective
regulatory Departments of the Reserve Bank.
(iii)
Similarly, for participation by other regulated entities, concurrence from
their respective regulators should be obtained.
Membership
The membership of the currency futures market of a recognised stock exchange
shall be separate from the membership of the equity derivative segment or the
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cash segment. Membership for both trading and clearing, in the currency futures
market shall be subject to the guidelines issued by the SEBI.
Banks authorized by the Reserve Bank of India under section 10 of the Foreign
Exchange Management Act, 1999 as ‘AD Category - I bank’ are permitted to
become trading and clearing members of the currency futures market of the
recognized stock exchanges, on their own account and on behalf of their clients,
subject to fulfilling the following minimum prudential requirements:
a) Minimum net worth of Rs. 500 crores.
b) Minimum CAR of 10 per cent
c) Net NPA should not exceed 3 per cent.
d) Made net profit continuously for last 3 years.
The AD Category - I banks which fulfil the prudential requirements should lay
down detailed guidelines with the approval of their Boards for trading and clearing
of currency futures contracts and management of risks.
AD Category - I banks which do not meet the above minimum prudential
requirements and AD Category - I banks which are Urban Co-operative banks or
State Co-operative banks can participate in the currency futures market only as
clients, subject to approval therefor from the respective regulatory Departments of
the Reserve Bank.
Position Limits
 The position limits for various classes of participants in the currency
futures market shall be subject to the guidelines issued by the SEBI.
 The AD Category - I banks, shall operate within prudential limits, such as Net
Open Position (NOP) and Aggregate Gap (AG) limits. The exposure of the banks,
on their own account, in the currency futures market shall form part of their NOP
and AG limits.
Risk Management Measures
The trading of currency futures shall be subject to maintaining initial, extreme
loss and calendar spread margins and the Clearing Corporations / Clearing Houses
of the exchanges should ensure maintenance of such margins by the participants
on the basis of the guidelines issued by the SEBI from time to time.
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Surveillance and Disclosures
The surveillance and disclosures of transactions in the currency futures market
shall be carried out in accordance with the guidelines issued by the SEBI.
Authorisation to Currency Futures Exchanges / Clearing Corporations
Recognized stock exchanges and their respective Clearing Corporations / Clearing
Houses shall not deal in or otherwise undertake the business relating to currency
futures unless they hold an authorization issued by the Reserve Bank under
section 10 (1) of the Foreign Exchange Management Act, 1999.
Powers of Reserve Bank
The Reserve Bank may from time to time modify the eligibility criteria for the
participants, modify participant-wise position limits, prescribe margins and / or impose
specific margins for identified participants, fix or modify any other prudential limits, or
take such other actions as deemed necessary in public interest, in the interest of financial
stability and orderly development and maintenance of foreign exchange market in India.
Terminology used in Futures markets
 Long Position- Go on buying a currency at future dates
 Short Position- Go on selling at future dates
 Maturity dates- The contracts due dates for delivery usually 3rd Wednesday of
January, March, April, June July, September, October and December
 Last trading day- Contracts can be traded up to the second business day prior to
the maturity date. Therefore unless holidays interfere, trading can be up to the
Monday preceding the maturity date
 Margin- The purchaser should deposit the initial margin or collateral. It can be by
way of cash or a letter of credit from a bank
 Marked to market- The value of the contracts will be valued on day to basis
using the closing price of the day and differential margin collected. This
differential margin is also called variation margin.
 Settlement- Only 5% of future contracts are normally settled through physical
delivery process. The seller delivers to the buyer and gets cash and the buyer gets
securities and parts with cash. Mostly buyers and sellers offset their original
position by taking an opposite position. The person who is long will go short for
the same delivery date
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 Round Turn- The complete buy/sell or sell/buy as above is called “round turn’
 Counter Party- The other person to the deal is called the counter party. But in
Future Contracts, the counter party risk is nil as the highly regulated exchange
itself ensures the settlement process.
 Open- The rate at which a currency gets quoted as the trading day opens
 High- The rate at which the currency was quoted for the highest value during a
trading day
 Low- The rate at which the currency was quoted for the lowest value
 Settle- The closing rate for valuation purposes
 Change- Indicates the change in the settle price from the previous day’s closing
rate
 Open Interest- Indicates the number of contracts outstanding
Now after over a year of introduction of exchange-traded currency futures in the USDINR pair on the stock exchanges in the country, the market regulators have now
permitted trading of Euro-INR, Japanese Yen-INR and Pound Sterling-INR on the
exchange platform. This is a move that the market had been demanding for a long time.
The currency derivatives segment on the NSE and MCX has witnessed consistent growth
both in traded value and open interest since its inception.
Current trends
The currency futures have gained momentum in both MCX-SX and NSE exchanges in
India and the situation as on 05-04-2011 (from BL dtd 06-04-2011) furnished here below
for ready reference.
Contracts
Open
High
Low
Close
Volume
USDINR-Apr 11
May11
June 11
44.58
44.82
45.15
44.65
44.92
45.17
44.51
44.79
45.09
44.62
44.89
45.16
2082225
117262
21681
Open
Interest
(OI)
908760
136740
56234
EURINR-Apr 11
GBPINR-Apr 11
JPYINR-Apr11
63.41
72.48
53.14
63.42
72.50
53.14
63.18
71.55
52.71
63.22
72.40
52.95
50573
20269
24837
45385
7321
10060
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Conclusion
 The market participants in Futures Markets may include NRIs and FIIs also at a
later date which may still cause an upward swing in the volumes
 Potential arbitrage opportunities between OTC products and futures could again
increase the volume of business in future markets
 The Government, as a part of economic and financial reforms, kick started the
much needed revival of financial sector reforms by introducing currency futures
for all the leading global currencies versus Indian Rupee
 Further pace of liberalization like permitting Non Resident Indians and Foreign
Institutional Investors also in futures markets may add further momentum to the
galloping futures markets in India
 Banks being the predominant players in futures markets too for hedging their
open positions and the clientele exposures, a complete knowledge of the working
of futures markets will enable rendering value added services to the customers in
the present day competitive environment.
LIBOR (London Inter -Bank Offered Rate) -Origin and Developments
For investments or borrowings made in an international currency like US$, the interest
rates are now linked to a bench mark rate LIBOR or LIBID and let us try to understand
briefly about the origin and the developments.
What is LIBOR?
An interest rate at which banks can borrow funds, in marketable size, from other banks in
the London interbank market. The LIBOR is fixed on a daily basis by the British
Bankers' Association. The LIBOR is derived from a filtered average of the world's most
creditworthy banks' interbank deposit rates for larger loans with maturities between
overnight and one full year
LIBOR-How it shot to prominence?
The LIBOR is the world's most widely used benchmark for short-term interest rates. It's
important because it is the rate at which the world's most preferred borrowers are able to
borrow money. It is also the rate upon which rates for less preferred borrowers are based.
For example a multinational corporation with a very good credit rating may be able to
borrow money for one year at LIBOR plus four or five points.
Countries that rely on the LIBOR for a reference rate earlier included the United States,
Canada, Switzerland and the U.K and in India also all the international borrowings and
investments and borrowings, investments at home denominated in a foreign currency, the
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interest rates are now linked to bench mark rate like LIBOR or LIBID
What is the difference between LIBID and LIBOR?
Both LIBID and LIBOR are rates primarily used by banks in the London interbank
market. The London interbank market is a wholesale money market in London where
banks exchange currencies either directly or through electronic trading platforms.
The acronym LIBID stands for London Interbank Bid Rate. It is the bid rate that
banks are willing to pay for euro currency deposits in the London interbank market.
Eurocurrency deposits refer to money in the form of bank deposits of a currency
outside the country that issued the currency. However euro currency deposits may be
of any currency in any country. The most common currency deposited as euro
currency is the US dollar. For example, if US dollars are deposited in a European
bank or any bank outside the U.S, then the deposit is referred to as a euro currency.
What Does London Interbank Mean Rate - LIMEAN Mean?
The mid-market rate in the London Interbank market, which is calculated by
averaging the offer rate (LIBOR) and the bid rate (LIBID). The LIBOR is the rate at
which funds are sold in the market, while the LIBID is the rate at which the funds are
purchased in the market.
The LIMEAN rate can be used by institutions borrowing and lending money in the
interbank market, instead of using the LIBID or LIBOR rates, in any lending
agreements. It can also be used to gain insight into the average rate at which money is
being borrowed and lent in the interbank market
What Does Euro Interbank Offer Rate - EURIBOR Mean?
The rate of interest at which panel banks borrow funds from other panel banks, in
marketable size, in the EU interbank market.
In other words, this is the rate at which participant banks within the European Union
money market will lend to another participant bank in the EU money market. Because
banks involved with EURIBOR are the largest participants in the EU money market, this
rate has become the benchmark for short-term interest rates.
9
EXCHANGE RATE SYSTEMS- EVOLUTION AND THE
DYNAMICS
Introduction:
Every sovereign nation has a distinct national currency and hence international trade and
financial transactions necessitated exchange of currencies. Different countries adopted
different exchange rate systems at different times. The following are some of the
exchange rate systems adopted by various countries.
The Gold Standard
Many countries had adopted Gold Standard as their monetary system during the last two
decades of the nineteenth century. This system was in vogue till the outbreak of World
War I. Under this system, the parities of currencies were fixed in terms of gold.
Purchasing power parity
After abandonment of Gold standard, the exchange rates were determined on the basis of
purchasing power parity (PPP) theory which was propounded by a Swedish economist
Professor Gustav Cassel. The theory in simpler terms stated that the currencies are valued
based on what they can buy. For an example if 135 Japanese Yen can buy a pen and the
same pen can be bought for one US Dollar, then exchange rate becomes USD1=JPY 135.
Under this theory the sole criterion to determine the exchange rate of two currencies was
their purchasing power.
The Breton Woods System
During the World Wars the economies were badly ruined and in order to correct their
Balance of Payments disequilibrium, many countries resorted to devaluation of their
currencies. As the race for devaluation started to boost the exports, there were violent
fluctuations in exchange rates and hence the international trade suffered a blow. The
bitter experience of war years forced the countries to create a free and stable multilateral
monetary system which would help restoration of international trade. In accordance with
an agreement reached in Breton Woods conference held in July 1944, with the main
objective of restoring free multilateral Trade and stable exchange rates, the International
Monetary Fund (IMF) was established in 1946. Under the Articles of IMF, an exchange
rate system, popularly known as Breton Woods System, was evolved and this was
followed by member banks till 1971.
The Breton Woods System required the member banks to fix the parities of their
currencies in terms of US Dollar or Gold. The objective of stable exchange rate was
achieved as the countries were asked to keep the fluctuations within +1% of their
declared parity. Under this system the central bank of the respective member country had
to intervene effectively in the market for keeping the exchange rate within the declared
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parity. This situation created a pressure for the central banks for maintaining sufficient
reserves and whenever required they could draw from IMF through SDR (Special
Drawing Rights) and other facilities extended by IMF. This resulted in huge demand for
US Dollars and there was a virtual run on the American currency. The Breton Woods
System finally collapsed as United States announced on August 1971 that it would no
longer convert US Dollars into Gold at the fixed rate committed to IMF.
Floating rate system
With the exit of fixed parities system, different countries experimented with various
exchange rate systems. Almost all the industrialized countries adopted some form of
“managed float”. If the value of a currency is not determined solely on demand and
supply but is managed by the Central Bank of the country through continuous
intervention, the same is known as ‘Dirty Float”.
Exchange rate of Rupee
The Indian Rupee was historically linked to the Pound Sterling as most of India’s
international trade transactions were denominated in Pound Sterling. Under the Breton
Wood’s System, as member of IMF, India declared its par value of Rupee in terms of
Gold and RBI maintained the par value of Rupee within the permitted band using Pound
Sterling as the intervention currency. When the Bretton Wood System broke down in
1971 and the major currencies started floating, Rupee was pegged to US$. On September
25,1975 rupee was delinked from a single currency and was linked to a basket of
currencies and the currencies included in the basket and their relative weights were kept
as a guarded secret so that the speculators do not get a wind of the direction in the
movement of exchange rate of rupee. With the liberalization process sweeping through
the financial sectors globally, it was felt that the forces of demand and supply should
determine the exchange rates.
Developments in India
Liberalisation in India started in the year 1991 and in March 1992 dual exchange rate
system was put in place. This was known as LERMS (Liberalised Exchange Rates
Management System). Two exchange rates were prevailing during that period, one
determined by RBI and the other determined by the market forces. Under this system
40% of current account receipts were converted at OR (Official Rate) and 60% at MR
(Market Rate). Later on an unified Exchange Rate System came into effect from 01-031993.Under this system Exchange rates were allowed to float fully and freely at market
determined rates. However RBI has the right to intervene in the market as and when
necessary to restore equilibrium in the market. All foreign Exchange transactions routed
through Authorised Dealers are to be at market based exchange rates. RBI also announces
its rates (which act as reference rates) based on market rates. Any person desiring to buy
or sell foreign Exchange can do so only through an AD and only for permissible
transactions.
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Current Account, Capital Account transactions:
India, being a member Bank of IMF having subscribed to Article VI of IMF, declared
that Indian Rupee will be fully convertible for all Current Account transactions with
effect from 01-03-1993. This resulted in removal of several trade restrictions and
extending relaxations in exchange control especially under Current Account Transactions
so that the full benefits of integrating the Indian economy with the world economy is
reaped by Indian Exporters and Importers. Current account transactions relate to
conversion of rupee to foreign exchange or vice versa for all trade related and personal
related purposes like tour, study, medical treatment, training/seminar etc.
Capital account convertibility refers to freedom to convert local financial assets into
foreign currency financial assets and vice versa at market determined rates of exchange.
Market rates
Exchange rates express the value of one currency in terms of the other. They involve:
Base Currency - Usually one unit of fixed amount of Currency
Terms Currency - Variable amount of local Currency
Example
1 USD= INR 43.9125
1 GBP= USD 1.4250
In an exchange rate 1USD= INR 43.9125, USD is the base currency and the Indian
Rupee is the terms/variable currency. Foreign Exchange transactions take place at the
exchange rates agreed to between the two parties.
 Purchase transactions- Where Foreign Currency is purchased by the AD from
the Customer. Example- Export Bill denominated in USD tendered by a
Customer is purchased by the Bank
 Sale transactions –Where Foreign Exchange is sold to a Customer by the Bank.
Example- An Importer buying USD from an AD for retiring an Import bill
denominated in USD. Here Bank is selling Foreign Exchange to an Importer.
Direct Quotations
In this method the home currency is the variable currency and the Foreign Currency is the
fixed (base) unit
Example : 1USD=INR 43.9125/43.9225
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Indirect Quotations
In this method, the home currency is the fixed /constant unit and the Foreign Currency is
the variable unit.
Example: INR 100=USD2.1850/2.1900
Here the cost of Foreign Currency is obtained by way of an arithmetical calculation and
not straight in the case of a Direct Quotation.
In India we have switched over to Direct Quotations from 02-08-1993. Banks quote rates
against one unit of Foreign Currency except for certain currencies for which rates are
quoted against 100 units of Foreign Currency
Example JPY 100= INR 39.4725
At present the currencies for which 100 units are taken as the base are Indonesian Rupiah
Japanese Yen, Kenyan Shilling and Spanish Peseta.
How exchange rates are quoted
Whenever a Bank quotes a rate of exchange it quotes in two way price
Example 1USD=INR 43.9175/43.9275
 USD is the Base Currency
 INR is the variable Currency
 The first rate 43.9175 is the rate at which the quoting Bank is prepared to buy one
unit of USD. This is the BID (buying) rate.
 The second rate 43.9275 is the rate at which the quoting Bank is prepared to sell
one unit of the Base Currency. This is the OFFER (Selling) rate.
 The difference of .01(1 paisa) between the BID and OFFER rate is the SPREAD
and the profit margin for the quoting bank
 Now in India exchange rates are purely market driven (based on demand/supply)
but with very purposeful intervention/monitoring by RBI
Cross Rates
The exchange rate which is derived from two other exchange rates is called a cross rate.
We can work out a cross rate by applying the chain rule mentioned below:
13
How a inter bank deal is done?
Example:
ABC bank quotes in the market as
USD1= INR 43.9125/43.9225 in a Reuters screen.
Here the quoting Bank’s buying rate for USD is 43.9125(BID rate) and selling rate for
USD is 43.9225(Offer Rate)
They always adopt the Dictum “BUY LOW SELL HIGH”
If this quote is acceptable for the counter party Bank and if they want to buy USD they
will be able to buy from the quoting Bank at 43.9225 (Quoting Bank’s Selling rate) and
if they want to sell USD to the quoting Bank they can do so at the rate 43.9125 (quoting
Bank’s buying rate). The quoting Bank can change its quote before the deal is confirmed.
Merchant Rates:
The rates quoted by the Banks to its Customers (Exporters, Importers, Remitters etc) for
various types of transactions are called Merchant Rates. The exchange rates for merchant
transactions can be broadly classified as under:
TT Buying Rate
Bill Buying Rate
TC Buying rate
FC Buying rate
TT Selling Rate
Bill Selling Rate
TC Selling rate
FC Selling rate
1.
Clean Inward remittances for which cover funds already
received in NOSTRO a/c
2. Collection proceeds of Export Bills/Cheques/Travellers
cheques/Currencies realized and credited to NOSTRO
a/c
3. Cancellation of a forward Sale Contract
4. for discounting Foreign Currency cheques payable
abroad
5. For conversion of FCNR/RFC/EEFC balance to Indian
Rupee
Purchase/discount/negotiation of Export Bills
For purchase of Travellers Cheques tendered for encashment
For purchase of permitted foreign currencies tendered for
encashment
1. For all clean outward remittances by way of DD/TT
2. Remittances towards direct import bills
3. recovery of export bills returned unpaid
4. for recovery of foreign Bank charges
5. Cancellation of Forward Purchase contract
6. Crystallisation
/Delinking
of
overdue
export
bills/cheques purchased by the AD
1. Remittances towards Import bills received on
collection/under LC opened
2. Delinking of Import bills (under LC issued by the bank)
For selling Travellers cheques
For selling Foreign Currencies
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The merchant rates are calculated/quoted based on on-going market rates and the base
rate to be fixed by the respective Bank after giving due consideration to the market trend,
volatility, existing position etc as it may not be possible to cover the transaction
immediately .
Cover rate and Base rate
The rate at which the Bank can cover a merchant transaction in the inter bank Market at
no loss no profit is called COVER rate.
Example: The rate at which a Bank can cover an Import transaction in USD by buying
USD from the market at Market’s selling price is the COVER Rate for that Import
transaction.
The base rate is arrived from the cover rate after allowing some cushion for any possible
adverse movements in rates before the cover deal is done. In practice there are instances
where the Cover rate and the Base Rate are the same. Member banks are allowed to load
margins in their discretion on the cover/base rate subject to compliance of maximum
spreads.
Computation of Exchange Rates (examples)
TT Buying Rate
Assume Inter Bank rate as
USD1=INR42.4525-42.4625
Base rate becomes
42.4525(rate at which the market Buys)
Less Exchange Margin (say 3 paise)
0.03
TT Buying Rate
42.4225
Bill Buying (sight Bill)
Assume Inter Bank Rate
USD 1=INR42.4525-42.4625
Base Rate becomes
Less Exchange Margin
42.4525
0.06
Bill Buying rate (sight Bill)
42.3925
TC Buying Rate
Take one month forward Buying rate (say)
42.5125
Less commission (not exceeding 1%)
0.43
TC Buying rate becomes
42.10 (rounded to nearest 5 paise)
FC Buying Rate
15
Deduct .50% form TC buying rate
0.21
FC Buying rate becomes
41.90((rounded to nearest 5 paise)
TT Selling rate
Assume Inter Bank rates as
USD1= INR 42.4525-42.4625
Base rate becomes
42.4625(rate at which market sells)
Add exchange Margin (say)
00.04
TT Selling Rate
42.5025
Bill Selling rate
Base rate
42.4625
Add exchange margin (say)
00.09
Bill Selling rate
42.5525
It is to be noted that all merchant quotes as above are based on on-going interbank
exchange rates which are not static and the volatility is subject to market situations that
may prevail at that point of time and nobody can precisely predict the movement of
exchange rates.
RBI POLICY RATES
SLR
CRR
Bank Rate
Repo
Reverse Repo
24%
6%
6%
6.75%
5.75%
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