RBI approves hedging in metal futures
Commodity Online MUMBAI: The Reserve Bank of India has permitted domestic producers and users of aluminium, copper, lead, nickel and zinc to hedge their price risk by taking hedge positions in international commodity futures exchanges.
Hedging will be to the extent of the average of the purchases/sales in the previous three financial years or previous years' turnover whichever is higher.
The decision follows the apex bank’s announcement as part of Annual Policy Statement 2007-08 recently.
The RBI has also allowed users of aviation turbine fuel (ATF) to hedge their domestic purchase exposure through over-the-counter (OTC) products.
Hedging exposure of ATF indirectly in crude oil, heating oil etc may not give a perfect hedge.
The RBI has authorised certain banks to grant permission for hedging to producers and users.
NCDEX GARSEDJDRJUN12 20 June 2012
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