Mumbai: Indian investors and institutions dealing in foreign currencies got
another shot in the arm on Tuesday as the regulators allowed Indian bourses
to start trading in derivatives contracts in three more currency pairs —
Rupee-Euro, Rupee-Japanese Yen (JPY) and Rupee-British Pound (GBP).
Currently, only trading in futures contracts in Rupee-US Dollar is allowed
on the bourses, which began on the NSE on August 29, 2008, followed by
MCX-SX.
Interestingly, the permission from the banking regulator Reserve Bank of
India (RBI) and the Securities and Exchange Board of India (Sebi) came
within a month of the combined turnover of the two forex derivative bourses
— NSE’s foreign forex trading segment and MCX Stock Exchange (MCX-SX) —
crossing the combined turnover of the cash market of NSE and BSE. On
Tuesday, the forex derivatives markets recorded a turnover of nearly Rs
34,500 crore, compared to about Rs 23,200 crore on the two bourses’ cash
segments. Although BSE offers forex derivatives trading, the segment is yet
to take off.
Following the global trend, where forex trading volumes dwarf volumes in
both equities and commodities, the forex derivatives segment in India took
just a year and a half since their launch to surpass the turnover in the
cash segment of the bourses. Tuesday’s regulatory notifications specified
that while in euro and GBP, each contract size will be of € 1,000 and
£1,000, in JPY, the corresponding contract size is of JPY 100,000.
Spokespersons from both NSE and MCX-SX declined to give any specific date
when these bourses will start trading in these three new pairs, but said it
should happen soon. Market players told TOI that there is a high probability
that contracts in the three new pairs will be introduced from February 1. U
Venkataraman, ED, MCX-SX. said, “I am sure the new currency pairs will add
depth to the currency futures markets,’’
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