RBI vide circular dated April 15, 2023 has clarified that resident entities are permitted to hedge their exposure to price risk of gold on exchanges in the International Financial Services Centre (IFSC) recognized by the International Financial Services Centres Authority (IFSCA).
To provide further flexibility to resident entities to hedge their exposures to price risk of gold, it has now been decided to permit resident entities to hedge their exposures to price risk of gold using OTC derivatives in the IFSC in addition to the derivatives on the exchanges in the IFSC, subject to the stipulations set out in the Master Direction – Foreign Exchange Management (Hedging of Commodity Price Risk and Freight Risk in Overseas Markets) Directions, 2022, as amended from time to time.
