Mumbai, 13 Aug: India must move cautiously on launching currency futures and the central bank must regulate such derivative contracts, the head of a clearing house said in an interview published in a leading financial dailytoday.
“We have still not reached a stage to digest floods of funds entering or leaving the country at a single go,” R.H. Patil, a member of a central bank appointed-panel on capital account convertibility told the paper.
The panel produced a roadmap last September for increased convertibility of the rupee by 2011. That includes a rupee futures market, but the central bank took months before it set up a working group in April to look at introducing rupee futures.
Patil said many global investment banks have vested interests in launching currency futures in India and allowing individuals in such a product would not be of any use as they lack funds.
“The lobby has been asking for addition of a speculative instrument, which is risky. It is always easier to govern fewer parties,” Patil, who is also a member of the technical advisory committee on monetary policy, said.