At the 16th Conference of the State Finance Secretaries, some of the State Finance Secretaries suggested that the RBI could play an advisory role in assisting the States in hedging their exchange rate risks arising from the policy of back-to-back transfer of external assistance.
In the context of the TFC recommendations and following the discussions at the 19th Conference of the State Finance Secretaries, held in January 2007, the first workshop on the management of foreign exchange risk by the States through the financial markets was organised by the Reserve Bank in May 2007, for the benefit of the State Government officials.