Rupee Dollar Derivatives commence trading on BSEs India INX
BSE reported that Honourable Finance Minister Nirmala Sitharaman inaugurated Rupee Dollar Derivatives on BSE’s India International Exchange (IFSC), Limited (India INX), which is India’s first international exchange based in the International Financial Services Centre (IFSC) located at Gujarat International Finance Tec-City (GIFT City).
Launching it virtually, the Finance Minster rang the bell electronically and declared the Rupee-Dollar Futures and Options contract open for trading on India INX. Discussing some of the contract specifications for this newly launched futures and options – the contract symbol is USDINR & INRUSD with the underlying assets being USDINR Spot Rate & INRUSD Spot Rate while the contract value remains to be USDINR quoted up to fourth decimal place & USD quoted in cents per 100 Indian Rupees. The contract size is 100 & 10,00,000. Tick size is set at 0.0025 & 0.01 with tick value being 0.25 USD or 25 cents & 1USD. The contracts will be available on the basis of 12 monthly and 11 weekly contracts for both.
By indulging in the trading of INR-USD futures and options, traders (participants) will be able to hedge, trade and settle in USD with market rules and ecosystems at GIFT City IFSC that are considered to be at par with the global markets. With the launch of the derivative, the trades which have been migrated to other international financial centres will now bring rupee trading back home. Since the India International Exchange trades for 22 hours a day, the INR-USD Futures and Options contract will also be available for 22 hours to all international participants around the world.
Back in 2013, Prime Minister Narendra Modi had invited the BSE to consider setting up a world class exchange at the GIFT City. Further to that, in 2015 an MoU was signed between the Government of Gujarat and BSE leading to the inauguration of India INX by the Prime Minister Narendra Modi on January 9, 2017 with a vision for India INX to become a price setter for at least a few of the highly traded products in the world as well as for IFSC to become a leading centre for raising capital for issuers across the globe. Operating on an advanced technology platform of EUREX T7, India INX is the fastest trading platform in the world with a turn-around time of 4 micro seconds. Presently, India INX is the leading exchange at IFSC with a cumulative turnover of more than USD 840 billion as on April 30, 2020 and a market share of around 90 per cent in Gift IFSC for April 2020.
Commenting on the occasion, Mr. Ashishkumar Chauhan, Chairman, India INX said, “The launch of INR-USD contracts is a great initiative to onshore the offshore rupee dollar markets. I would like to laud Hon'ble Prime Minister Shri. Narendra Modi for his vision in setting up the GIFT City IFSC, Hon'ble Finance Minister Smt. Nirmala Sitharaman for taking it further to make the GIFT IFSC a true leader in its field and inaugurating the Rupee Dollar contract at India INX, at Gift City and all the other regulators and officials who contributed in making this launch a huge success.”
Adding to the successful launch of Rupee Dollar Derivatives on India INX, Mr. V Balasubramaniam, MD & CEO, India INX commented, “It is a momentous occasion and a historic day for us at BSE’s India INX with the launch of Indian Rupee - US Dollar Futures and Options contracts by the Honourable Finance Minister though a video conference. Let me thank her and also express my gratitude to SEBI and RBI for providing us all the approvals for the launch of this contract. We look forward to good participation from our members and international participants as this will be the first offshore contract launched on Indian Rupee Derivative.”