Emerging Markets Rates and Currencies Handbook

liquidity. The RBI has allowed sustained development of INR Interest rate swap market and allowed certain benchmarks for effective risk mitigation and expressing rate view. * For more details refer: https:/ /www.rbi.org.in/Scripts/BS_ViewBulletin.aspx Convertibility Fully convertible on current account onshore. Partly convertible on capital account, and capital account transactions are subject to specific documentation requirements/ regulatory approvals. FX Spot FX Forwards NDFs FX Options Interest Rate Swap Interest Rate Options XCCY swaps Market Overview Onshore Market      ✗  Offshore Market ✗ ✗      Onshore Volume (MM USD Daily) Offshore Volume (MM USD Daily) Onshore Max Tenor (Or Typical Tenor For Spot) Offshore Max Tenor (Or Typical Tenor For Spot) Onshore Typical Deal Size (MM USD) Offshore Typical Deal Size (MM USD) Onshore CitiFX Pulse Capabilities 17000-19000 N/A T+2 N/A 5-10 N/A  3000-4000 N/A 1 year N/A 10-15 N/A  500-700 (X) 2000-3000 2 years 10 years 5-10 (X) 25 ✗ 100-300 500-800 5 years 5 years 5-10 50 ✗ 1500-2000 1500-2000 10 years 10 years 5-10 30-50 ✗ Nil (as of now) Nil (as of now) 10 years 3m/1y - 1y/5y N/A 10 ✗ 80-100 50-75 10 years 5 years 10-20 10-20 ✗ Offshore CitiFX Pulse Capabilities ✗   ✗ ✗ ✗ ✗ Onshore Market Interest Rate Options are expected to start soon. Source: Citi indicative information Market opening hours and liquidity during the day Fixing FBIL benchmark fixing is calculated during the window between 11.30 AM-12.30 PM and published around 01:30pm Mumbai Time or thereafter as soon as practicable. RBI has issued separate guidelines for users to manage their FX exposure and INR interest rate exposure. Regulation Offshore Restrictions: Resident entities can access the onshore INR FX markets (both OTC and exchange traded) to hedge FX exposures, but are not allowed to hedge exposures in the offshore market. Onshore Restrictions: RBI has now permitted AD Cat-I banks operating International Finance Services Centre (IFSC) Banking Units (IBUs) to offer INR non-deliverable derivative contracts (NDDCs) to (a). persons not resident in India, as well as (b.) resident non-retail users for the purposes of hedging. Effective September 1, 2020, RBI has revised the regulations for risk management and interbank dealings for hedging of foreign exchange risk. Onshore hedging regulations are now uniform for all entities whether