How do foreign investors lock the currency rates?

General
1

  1. investors investing in fixed term debt. instruments already know what they will get & when they will get.

  2. investors in equities etc with no fixed term plans , here they don’t know exactly the return & when they will get.

in both the cases , currency rate is not possible to predict .

suppose an FII invests $1 million at the rate of 66 (i.e. 6.6 crores ) in t-bills & after one year the investment has returned 6% but the USD is 67.5 .

is there any kind of forwards , future or outward remittance contract banks offer that the rate at which USD came inward & rate at which USD will go outward are the same ?

2

FIIs need to buy USDINR Futures or Options to protect themselves against rupee depreciation/ dollar appreciation (66 to 67.5, in your example)