I forgot to square off my currency futures position today , since it is expiry today I was told it will be settled by the exchange and the exact price will be known only by 5.30/6 and the settlement price is calculatated by the exchange and RBI? Do I have the right information? I need more clarity on this.
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Yes, RBI is involved in determining the settlement price for the currency futures based on the best bidders & sellers (both Banks), they shuffle the list of bank every fortnight. Except RBI no one determines the settlement price for currency. Check the link, the reference rates given by RBI.
http://rbi.org.in/Scripts/BS_PressReleaseDisplay.aspx?prid=30878
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Yes. On Expiry day, settlement rate will be w.r.t. RBI reference rate.
On other days, it will be half an hour weighted average of the contract.
Similar to how Nifty futures is settled on expiry based on the underlying price of the Nifty Index, similarly on the expiry day of currency futures, if you don't square off all futures are settled to the RBI reference rate on the expiry day, which acts as an underlying for the futures trading on the exchanges.
RBI reference rate for a particular day can be seen on the RBI website, http://rbi.org.in/Scripts/BS_PressReleaseDisplay.aspx?prid=30878
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Here's an extract from the CDS training module on how the RBI reference rate is calculated and how exactly RBI is involved.
1.4.9 RBI reference rate
RBI reference rate is the rate published daily by RBI for spot rate for various currency pairs. The rates are arrived at by averaging the mean of the bid / offer rates polled from a few select banks during a random five minute window between 1145 AM and 1215 PM and the daily press on RBI reference rate is be issued every week-day (excluding Saturdays) at around 12.30 PM. The contributing banks are selected on the basis of their standing, market-share in the domestic foreign exchange market and representative character. The Reserve Bank periodically reviews the procedure for selecting the banks and the methodology of polling so as to ensure that the reference rate is a true reflection of the market activity. There is an increasing trend of large value FX transaction being done at RBI reference rate even on OTC market. The reference rate is a transparent price which is publicly available from an authentic source.
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RBI reference rate is used, but RBI is not involved in any way in terms of trading currency futures on Indian exchanges.