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Our Bureau

Mumbai, Aug. 20 According to the RBI guidelines only USD-Indian rupee currency futures will be traded on the exchanges.

There will be no trading in options. NRIs and FIIs are not eligible to trade in currency futures.

The contract size will be of $1000 and the tick size 0.25 paise. Contracts will traded and settled in Indian rupees. There will be 12 monthly contracts starting with the current month onwards. The near-month contract will trade till 12 noon on the second day prior to the last business day in the month.

The final settlement will be on the last business day of the month and shall be based on the RBI’s reference rate on the last trading day of the month. The daily trading hours for the contracts will be from 9 a.m. to 5 p.m.

The trade in currency futures will co-exist with the prevalent OTC market for forwards where the banks and corporations have been hedging their foreign currency risks so far.

This market has average daily volumes of $34 billion. Currency futures will be multi-party contracts unlike the bilateral contracts on OTC.

RBI and SEBI had issued guidelines for trade in currency futures on August 6 after the RBI-SEBI constituted Standing Technical Committee submitted its report on norms and implementation details of exchange traded currency derivatives in May.

More Stories on : Foreign Institutional Investors | Derivatives Markets | NRIs | Forex

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