Recently RBI issued Notification No. FEMA.3(R)/2018-RB dated December 17, 2018 and made changes to the Trade Credit (Supplier’s Credit/Buyer’s Credit) framework. The circular covered borrowing & lending in foreign currency (including Trade Credit which is a type of borrowing in foreign currency). The changes effected were covered in Schedule II of the said circular.
Subsequently, RBI issued A.P. (DIR Series) Circular No. 23 dated March 13, 2019 and laid out the revised framework for Trade Credit in India. This revised policy replaces the existing Master Direction on Trade Credits with immediate effect.
This brings us to the pertinent question – what has changed? Our team at Myforexeye studied the two circulars and has consulted with few industry veterans and prepared a short summary for clients & other enthusiasts. The summary is for Trade Credit under the ‘automatic route’.
What has changed/been amended?
What is new?
What remains the same?
08 May 2020 05:21 PM
Converting one exchange rate into another at a particular price makes transferring rates. Ideally all nations should be treated as equal and there shouldn’t be any exchange rate applicable which would mean to have a universal currency.
24 Apr 2020 03:08 PM
Managing risk in a financial market is required to keep a check on the adverse movements in the instrument of the market. Particularly in the foreign exchange market.
10 Apr 2020 06:12 PM
So was India’s decision on locking down the country for 21 days required? The implication on the economic growth or rather slowdown has only made many doubt the timing and preparedness of the decision.
24 Feb 2020 05:08 PM
When they say the currency markets are volatile, it is the spot exchange rate, which is being referred to, which fluctuates within seconds.
07 Feb 2020 03:19 PM
Derivatives market enables access to financial assets for trading at a future date and not just at the market trading date. In currency derivatives the trader agrees to buy or sell a fixed amount of a specified currency at the end.
27 Jan 2020 02:13 PM
Well devaluing a currency can give a thrust to the exports and reduce the trade deficit but for any economy which has higher imports, the consequences can be on the negative too.