Emerging Markets Rates and Currencies Handbook

59 Citi | Emerging Markets Currencies Handbook 2021 *Can also be applied to long-term NDFs Source: Citi indicative information FX Spot FX Forwards NDFs FX Options Interest Rate Swap Interest Rate Options XCCY swaps Market Overview Onshore Offshore Onshore volume (MM USD daily) 30 — 40 10 — 20 N/A N/A N/A N/A 20 — 30 Offshore volume (MM USD daily) N/A N/A N/A N/A N/A N/A Bespoke hedge dependent* Onshore max tenor (or typical tenor for spot) T + 2 1 Year N/A N/A N/A N/A 1 Year Offshore max tenor (or typical tenor for spot) N/A N/A N/A N/A N/A N/A Bespoke hedge dependent* Onshore typical deal size (MM USD) 0.50 — 1.00 0.50 — 1.00 N/A N/A N/A N/A 1.00 — 3.00 Offshore typical deal size (MM USD) N/A N/A N/A N/A N/A N/A Bespoke hedge dependent* CitiFX Pulse Capabilities Market opening hours and liquidity during the day 17.00 09.00 14.00 Good Liquidity No Liquidity Moderate Liquidity Fixing (incl. ticker) No fixing available. Regulation Residents Resident corporatesmay hold business foreign currency accounts (BFCA). Borrowing from offshore is subject to specific approvals. Non-resident restrictions Non-residents may hold foreign currency accounts onshore. Investment related — Inward Investment account. Current Transaction relation — FCBU account. Repatriation of profits or disinvestment proceeds on non-resident FDI inflows are permitted freely. License requirements No specific license requirements. Requirements to open a foreign currency account KYC requirements must be met prior to account opening. Deal Management Rollover : Rollover/extension for the new delivery period to be done at the prevailing market rate, provided the bank is satisfied with documentary evidences that customers are unable to perform the contracts due to changes in the actual requirements or other valid exigencies. Unwinding : Customers can cancel FX forward deals on or before maturity. Gains from cancellations cannot be passed onto client, however losses have to borne by the customer. Early Maturity : Early utilization of partial/full amount is allowed. Documentation Requirements Product specific Documents to show underlying commercial transaction is mandatory and is required on or before the FX trade date. Further there is a requirement to have a board resolution in place to enter into transactions. Trade flows Relevant documents as defined under LC/Trade terms. Capital flows/FDI Relevant documents as required under remittance purpose headings and additional documents to fulfill Central Bank approval requirements. Additional Comments Balance sheet hedging permissible on selected items. Hedging is also allowed based on past performance. Foreign Investors are permitted hedge FI and Equity (CSE) exposures. There are specific regulations issued by CBSL covering these and above requirements. *The Central Bank recently issued a circular temporally halting FX forwards for a period of 3 months (till 26th April 2021). For latest regulatory updates please refer https://www.cbsl.gov.lk/ Citibank, N.A. Sri Lanka No 65C, Dharmapala Mwt, Colombo 07, Sri Lanka FX Sales Contact: +94 11 4796618/ +94 11 4796622 Note: Citigroup Inc. and any of its affiliates do not provide accounting, tax, or legal advice. Please seek advice from a relevant licensed advisor. Source: Relevant legislation, publicly available sources. Sri Lanka