In response to the draft Guidelines, many corporates and industry associations FEDAI and FIMMDA have represented that prohibiting cost reduction structures will seriously impede the dynamic forex risk management operation of corporates and that their competitiveness in the global markets, as their counterparts have flexibility in using such products internationally.
Additionally, if such structures are banned, some corporates may not hedge their exposures due to costs, and this may result in aggregation of open currency risk in the system, which is riskier than allowing hedging within a range.