EconomyMonday, 12 October 2026·The Hindu - Economy
RBI’s October 2026 forex curbs: rebooking ban, lower exposure threshold and 20% FERR
On October 10, 2026, RBI issued two circulars to curb rupee volatility through tighter forex derivative rules.
Key highlights
Direct fact
In October 2026, the Reserve Bank of India (RBI) issued two circulars on foreign exchange market regulation, including a $5 million exposure threshold and a 20% Foreign Exchange Risk Reserve (FERR) for eligible INR-linked derivative contracts.
Key specifics
- October 10, 2026: RBI issued two circulars to ensure orderly functioning of the foreign exchange market.
- Rebooking of cancelled foreign exchange derivative contracts involving INR is not permitted after the directions.
- The no-underlying-exposure threshold was cut from $100 million to $5 million across Authorised Dealers (ADs) and Recognised Stock Exchanges.
- For notional value above $2 million, ADs must maintain FERR with RBI in cash at 20% of the INR equivalent.
- RBI said the measures aim at market discipline, risk management and a transparent forex market.
Exam lens
Economy and banking regulation MCQ, RBI circular date, $100 million to $5 million threshold change, 20% FERR, INR-linked derivatives — a likely question on forex market volatility measures.