Relaxation in EEFC and Forward Contract are pragmatic steps aim to benefit Exports Sector: M. Rafeeque Ahmed, President,
FIEO/PUB/PR /79/12 - July 31, 2012
Relaxation in EEFC and Forward Contract are pragmatic steps aim to benefit Exports Sector: M. Rafeeque Ahmed, President,
FIEO
Mr M Rafeeque Ahmed, President, Federation of Indian Export Organisations(FIEO) thanked the RBI for accepting FIEO’s twin suggestions with regard to currency management-one with regard to EEFC and other relating to Forward Contract. The restoration of the erstwhile stipulation of allowing credit of 100 percent foreign exchange earnings to the EEFC accounts subject to the condition that the sum total of the accruals in the account during a calendar month should be converted into Rupees on or before the last day of the succeeding calendar month after adjusting for utilization of the balances will give a lead time of 30 to 60 days for settling import commitments saving costs of currency conversion if one had to buy the same from the market, said Mr Ahmed. This will particularly benefit, Gems and Jewellery, Electronics, Petroleum, Plastics sector as well as Merchanting trade,added President, FIEO.
Allowing the exporters to cancel and rebook forward contracts to the extent of 25 percent of the total contracts booked for hedging their exposure will provide, observed FIEO Chief, requisite flexibility and would enable the exporter to re-book the contract which are often a result of the buyer cancelling a scheduled remittance due to demand –supply and pricing in the international market.
