NSE Launches Weekly Futures For 3 Currency Pairs

On Monday, NSE launched weekly futures and options contracts on three currency pairs: Euro-Indian Rupee, Japanese Yen-Indian Rupee and Pound Sterling-Indian Rupee.

"NSE is launching a weekly futures contract for the first time, while we have already seen market acceptance in weekly options contracts across asset classes," the exchange's MD and CEO Vikram Limaye said in a statement.

The weekly derivatives on currency pairs apart from reducing time-related costs will also help market participants to hedge their currency exposure from short-term market movements, he added.

Currently, the exchange offers cash-settled futures and options (F&O) on four currency pairs: USD-INR, EUR-INR, GBP-INR and JPY-INR and three cross currency pairs: EUR-USD, GBP-USD and USD-JPY.

The contract cycle available is 12 serial monthly contracts in futures and three serial monthly contracts followed by three quarterly contracts of the cycle in options.

With multiple developments in the global market and uncertainties due to the ongoing pandemic among others unfolding this year, there has been a need felt for exchanges to make available a wider product suite to match needs of investors and hedgers, the exchange said.

According to the exchange, non-USD currency pairs have been witnessing a good increase in daily turnover.

With the launch of weekly derivatives in these currency pairs, the exchange said that participants will be able to manage their exposures more efficiently in a market with tight bid-ask spreads as compared to the over the counter (OTC) markets.