INDIA EASES CURRENCY-SWAP RULES TO STOP RUPEES SLIDE....

India’s central bank eased rules for currency swaps to boost foreign-exchange supply in the financial system and stem the rupee’s slide to a record low this week.

The rupee extended a rebound to 0.4 percent, halting a seven-day drop, after the Reserve Bank of India (RBI) removed a US$100 million limit on net foreign-currency sales via swaps, according to a statement on its Web site yesterday. The decision will allow companies with overseas income to sell more US dollars in the local market, according to Standard Chartered PLC

 The rupee touched an all-time low of 52.73 per US dollar on Tuesday and has declined 14.2 percent this year.

 “Some corporates had already reached their limits and so their banks could not execute orders to sell the dollar.”

The rupee lost more than 7 percent so far this month, heading for the worst monthly decline since 2008, as Europe’s sovereign debt crisis led investors to sell emerging-market assets in favor of the relative safety of the US dollar. The Dollar Index, which tracks the currency’s performance against that of six major trading partners, rose 3 percent this month.

The rupee traded at 52.19 per US dollar at 2:38pm in Mumbai yesterday, bringing its decline in the past four months to 15 percent, the biggest drop among 10 Asian currencies.

 Mumbai the drop will have an “immediate impact” on the country’s inflation, which is the fastest among BRIC nations.

“The more the rupee drops, the more difficult it would be for the central bank to stay pat on rates.. “There will be pressure on the RBI to abandon its stance and do another hike.”so the

India  central bank eased rules for currency swaps to boost foreign-exchange supply in the financial system and stem the rupee’s slide to a record low this week.

The rupee extended a rebound to 0.4 percent, halting a seven-day drop, after the Reserve Bank of India (RBI) removed a US$100 million limit on net foreign-currency sales via swaps, according to a statement on its Web site yesterday. The decision will allow companies with overseas income to sell more US dollars in the local market .so INDIAN company hedge the currency swap so that raise in $ praises vs rupees will manage foreign company already manage their RISK but indian company not doing that, 

some company already doing that but for other too late now time gone ..India sry indian investors global derivatives exchanges even in Europe ..

in worlds 20 largest exchanges Korea stock exchange big one around $ 854,791,792

than US Chicago Board Option Exchange is $ 306,667,851 than France (MONEP) , Eurex (Germany &Switzerland )etc...

this all country have big option market why "  India eases currency-swap rules to stop rupee’s slide"  not a good Risk  Management as Rupees values still going down....

SPV BY FII(Foreign institution investor)

SPVs BY FII
SPV route is also resorted to by foreign companies to enter into
areas of business in India which are prohibited for them under
automatic route. Our foreign investment policy does not allow
foreign investors to invest in certain business activities in India
without approval from FIPB (Foreign Investment Promotion
Board). As a result the foreign investors take SPV route to
reach the Indian markets. As seen in case of Vishal Retail Limited,
which transferred all its fixed assets to a special purpose vehicle
(SPV) that is predominantly owned by the foreign private equity
firm – Texas Pacific Group (TPG). Once the assets are parked
in the SPV, TPG will run the entity as agreed under the MOU
to be signed between the two companies.
As per current negotiations, TPG has set up a wholesale company
called TPG Wholesale Pvt. Ltd, while another company Airplaza
Retail Holdings Pvt. Ltd, owned by the Shriram Group, has
formed a retail company to takeover the retail business of Vishal
Retail Ltd. Thus under this set up two SPVs were formed, one
as a wholesale company owned by TPG and another as a retail
company owned by an Indian investor.
The assets and liabilities of Vishal have been transferred to
the SPV owned by TPG on a slump sale basis, and Vishal
Retail has ceased to exist after the deal. The retail stores which
were run by Vishal along with all other assets, which will
then be owned by the TPG- founded wholesale company, will
be leased to the retail company.
Al l thi s a r r angement wa s done be c aus e for e ign di r e c t
investment of up to 51 percent is allowed in single-brand retail
and up to 100 percent in wholesale business. Thus what TPG
could not do directly, it will get it done by an indirect way in
the name of Strategic investment and Vishal Retail will be
bailed out of its financial mess.