**Summary:**
This circular, RBI/2022-23/151 A. P. (DIR Series) Circular No. 19, issued by the Reserve Bank of India (RBI) on December 12, 2022, amends existing regulations regarding the hedging of gold price risk in overseas markets. Previously, resident entities in India were prohibited from hedging their exposure to gold price risk in overseas markets. This circular now permits eligible entities to hedge their exposure to gold price risk on exchanges located in the International Financial Services Centre (IFSC) recognized by the International Financial Services Centres Authority (IFSCA). The circular is issued under Sections 10(4) and 11(1) of the Foreign Exchange Management Act, 1999 (42 of 1999) and should be read in conjunction with the Master Direction Foreign Exchange Management Hedging of Commodity Price Risk and Freight Risk in Overseas Markets Directions, 2022 A. P. (DIR Series) Circular No. 21 dated December 12, 2022. Further information can be obtained from Dimple Bhandia, Chief General Manager, Financial Markets Regulation Department, Central Office, Reserve Bank of India, 9th Floor, Central Office Building, Shahid Bhagat Singh Road, Fort, Mumbai – 400 001. Contact information includes telephone: 91-22-2260 1000, fax: 91-22-22702290, and email: cgmfmrdrbi.org.in.
Key Entities Referenced
Reserve Bank of India: The central bank of India, responsible for regulating the Indian financial system.
All Authorised Dealer Category I Banks: Banks authorized to deal in foreign exchange under the regulations of the Reserve Bank of India.
Hedging of Gold Price Risk in Overseas Markets: The subject of the circular, referring to the management of potential losses due to fluctuations in gold prices in international markets.
Bimonthly Monetary Policy Statement: A periodic statement issued by the Reserve Bank of India regarding monetary policy.
Hedging of Commodity Price Risk and Freight Risk in Overseas Markets Reserve Bank Directions, 2018: A set of regulations issued by the Reserve Bank of India governing the hedging of commodity and freight risks in overseas markets.
International Financial Services Centre IFSC: A financial center within India that aims to provide financial services to non-residents and residents, typically with regulations that are more liberal than those in the rest of the country.
International Financial Services Centres Authority IFSCA: The regulatory body overseeing the International Financial Services Centres (IFSCs) in India.
Foreign Exchange Management Act, 1999: An Act of the Parliament of India to consolidate and amend the law relating to foreign exchange with the objective of facilitating external trade and payments and for promoting the orderly development and maintenance of foreign exchange market in India.
भारतीय �रज़व र् ब�क
RESERVE BANK OF INDIA
RBI/2022-23/151
A. P. (DIR Series) Circular No. 19 December 12, 2022
All Authorised Dealer Category – I Banks
Madam / Sir,
Hedging of Gold Price Risk in Overseas Markets
Please refer to Paragraph 4 of the Statement on Developmental and Regulatory
Policies announced as a part of the Bi-monthly Monetary Policy Statement for 2022-23 dated
December 07, 2022 regarding hedging of price risk of gold in overseas markets. Attention is
also invited to the Hedging of Commodity Price Risk and Freight Risk in Overseas Markets
(Reserve Bank) Directions, 2018 dated March 12, 2018, as amended from time to time.
2. Resident entities in India are currently not permitted to hedge their exposure to price risk of
gold in overseas markets. On a review, it has been decided to permit eligible entities to hedge
their exposure to price risk of gold on exchanges in the International Financial Services Centre
(IFSC) recognised by the International Financial Services Centres Authority (IFSCA).
3. The Master Direction – Foreign Exchange Management (Hedging of Commodity Price Risk
and Freight Risk in Overseas Markets) Directions, 2022 (A. P. (DIR Series) Circular No. 21
dated December 12, 2022) have been issued today and are enclosed herewith.
4. The directions contained in this circular have been issued under Sections 10(4) and 11(1)
of the Foreign Exchange Management Act, 1999 (42 of 1999) and are without prejudice to
permissions/ approvals, if any, required under any other law.
Yours faithfully,
(Dimple Bhandia)
Chief General Manager
िव�ीय बाज़ार िविनयमन िवभाग, क��ीय कायार्लय, 9वी मंिजल, केन्�ीय कायार्लय भवन, शहीद भगत �संह मागर्, फोटर्, मुंबई – 400 001
फोन: (91-22) 2260 1000, फैक्स: (91-22) 22702290, ई-मेल: cgmfmrd@rbi.org.in
Financial Markets Regulation Department, Central Office, 9th Floor, Central Office Building, Shahid Bhagat Singh Road, Fort,
Mumbai – 400 001
Tel: (91-22) 2260 1000, Fax: (91-22) 22702290, E-mail: cgmfmrd@rbi.org.in
िह�ी आसान है, इसका प्रयोग बढ़ाइए