SEBI eases margin norms for dollar-rupee contracts

The Securities and Exchange Board of India (SEBI) today withdrew certain restrictions it had imposed on dollar-rupee derivative trading in July last year, with the rupee stabilising over the recent months.

The market regulator had, on 9 July 2013, in consultation with RBI had doubled the initial margins and extreme loss margins for dollar-rupee contracts.

The steps were taken in the backdrop of extreme volatility in rupee value against the US dollar, which had seen the Indian currency hit a historic low near Rs 70 against the greenback.

The Indian unit is now trading around 60 levels against the dollar with some easing of volatility amidst increasing dollar inflows to the stock markets.

SEBI has now decided to ease the restrictions and the margin requirements are being halved from the current level to bring them back to their original levels.

In a circular issued today, SEBI said it has decided to "restore the margins for dollar-rupee contracts to pre-8 July 2013 rates", effective 15 April.

The rupee, however, ended weaker against the US dollar today due to consistent demand for the US currency among local and foreign banks.

The rupee closed at 60.13, down 0.07 per cent from previous close. The local currency opened at 59.91, up from Friday's close of 60.085 per dollar, and touched a high and a low of 59.78 and 60.25 per dollar, respectively.