RBI widens options for rate futures

MUMBAI (Reuters) - 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.

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(Reporting by Suvashree Dey Choudhury; Editing by Toby Chopra)