South Korea restricts FX derivatives trades
SEOUL – South Korean officials will introduce restrictions on foreign exchange derivatives trades on January 1, 2010, in response to large corporate hedging losses and inadequate risk management at banks.
According to a notice issued on November 19 by the Financial Services Commission (FSC), notional value of FX derivatives with corporates will be capped at 125% of the notional value of exports.
The fixed ratio can be adjusted upward for “growth companies” if exporters can agree this with a bank
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