Event Details

Seminar on Unhedged Foreign Currency Exposure of Corporates

Learning, Risk Management

Saturday, September 13, 2014
Conference Room, C-7 1st Floor, CAFRAL, Bandra Kurla Complex, Bandra (E), Mumbai. 10:30 AM - 2:00 PM

Introduction

Unhedged foreign currency exposures of entities which have borrowed from banking system are an area of concern not only to individual entities but also to the entire financial system. Entities which do not hedge their foreign currency exposures may have to incur significant losses due to adverse exchange rate movements. These losses may reduce their capacity to service the loans taken from the banking system. Thus, the exchange rate volatility may affect the health of the banking system through spill over effects from the corporate sector. RBI has been issuing guidelines since 2001, sensitising banks to monitor the unhedged forex exposure of the entities on which they have taken credit exposure. 

Objective

The objective of the seminar is to sensitise the banks towards the risk involved with unhedged foreign currency exposure of the entities on which they have taken credit exposure and the need to monitor such exposures so as to ensure that the exchange rate volatility does not have any spill over effect on the banking system adversely. The seminar will also provide a platform to the participants to discuss the issues and challenges in effectively monitoring the unhedged forex risk. Anand Sinha, former Deputy Governor, RBI will deliver the opening remarks. 

 

The Seminar is specifically designed for senior officers from banks and RBI.

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