RBI Widens Options For Rate Futures

Mumbai: The Reserve Bank of India (RBI) relaxed guidelines on what domestic interest rate futures can be offered on Friday, allowing banks to hedge their short-term interest rate exposure.

Until now, banks could not hedge their interest rate risk on active government bond benchmarks other than 91-day treasury bills.

Registered exchanges can select the underlying instrument or interest rate of new contracts, subject to RBI approval, the central bank said in a circular.