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India kicks off forex futures trade

India kicks off forex futures trade
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First Published: Fri, Aug 29 2008. 04 02 PM IST
Mumbai: India kicked off its first exchange-traded rupee futures with heavy trading reported in the first minutes of business and front-month contracts seeing the highest activity.
Dealers said banks and large companies made the bulk of trading, even though the contract size is small compared with exchange-traded currency futures elsewhere.
More than 8,000 contracts were traded on the National Stock Exchange (NSE) in the late morning deals, the first of several platforms planned, with the heaviest trade on the September and October contracts, NSE data showed.
On the spot market, the rupee was trading at 43.74/75 per dollar, slightly firmer than the previous day’s close at 43.78/79.
India is trying to develop more sophisticated financial markets and hedging tools to support its rapidly growing economy and Finance Minister P.Chidambaram said at the start of trading that the government needed to push on with more instruments.
“After having launched currency futures, we need to revitalise exchange-traded interest rate derivatives markets, offer exchange-traded credit derivatives and also need to strengthen the corporate bond markets,” he said.
“These three products are high on the priority list of the government and I ask the government to move forward on this,” Chidambaram added.
Each contract size is $1,000, smaller than 12.5 million Japanese yen or A$100,000 contract sizes on the Chicago Mercantile Exchange.
The Multi Commodity Exchange of India and the Bombay Stock Exchange have also received in-principle approval to offer exchange-trade currency futures.
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First Published: Fri, Aug 29 2008. 04 02 PM IST
More Topics: India | Rupee | Futures | FX | NSE |