FIIs Get RBI Nod To Hedge FX Risks

The Reserve Bank of India (RBI) has permitted foreign institutional investors to hedge foreign currency risks arising out of investment in IPOs via the Application Supported by Blocked Amount route.

The Reserve Bank of India (RBI) has permitted foreign institutional investors (FIIs) to hedge foreign currency risks arising out of investment in IPOs via the Application Supported by Blocked Amount (ASBA) route, NDTV reports. The foreign currency rupee swaps for hedging flows under ASBA will be available for 30 days. The application money of investors will remain blocked in bank accounts until the process of allotment of shares is completed. The ASBA facility was first introduced in September 2008 for public offers when retail investors were allowed to use it.

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