NSE to start currency futures trading on 29 August

20 August 2008

Mumbai: The National Stock Exchange (NSE) will start live trading in currency futures from 29 August.

Three exchanges, the National Stock Exchange, the Bombay Stock Exchange and the Multi Commodity Exchange of India (MCX), have sought permission from the Securities and Exchange Board of India (SEBI) for starting currency futures trading. 

The Reserve Bank of India had, earlier, issued guidelines for trading in currency futures.

As per the guidelines, only resident Indians would be allowed to deal in exchange-traded currency futures to hedge an exposure to foreign exchange rate risk or otherwise.

Only dollar-rupee contracts will be allowed and each contract would be required to have a of $1,000 (equivalent to about Rs42,000).

The initial contracts would have an upper limit of $25 million and would mainly benefit small corporates with limited forex exposures, banking sources said.