15 Years of Exchange Traded Currency Derivatives Segment on NSE

In the 15-year journey, close to 20 billion contracts worth Rs 609 trillion have been transacted on the exchange.

A new beginning for Exchange Traded Derivatives was marked with the addition of a new asset class – Currency, on August 29, 2008. The National Stock Exchange of India (NSE) launched the Exchange Traded Currency Derivatives Segment with the launch of Futures on the currency spot rate of the US Dollar - Indian Rupee. The first day of trading witnessed the exchange of 65,798 contracts worth Rs 291 crores with participation from more than 150 trading members, including banks.

Exchange-traded currency derivatives have served as a viable mechanism for price discovery for different types of market participants with currency exposures, particularly those seeking competitive FX pricing. The presence of a clearing corporation has eliminated counterparty guarantee credit risk. Furthermore, the settlement of daily mark-to-market obligations has reduced the scope for the accumulation of mark-to-market losses in the books of participants.

In the 15-year journey, close to 20 billion contracts worth Rs 609 trillion have been transacted on the exchange. In the last 10 years, the number of traded contracts has increased by 7 times, from a daily average of 2.7 million contracts in FY14 to 19.2 million in FY23. During the same period, turnover has increased by 3.4 times, from a daily average turnover of Rs 120 billion in FY14 to Rs 414 billion in FY23.

NSE now offers currency futures and currency options on 7 currency pairs, namely the 4 Indian Rupee pairs - US Dollar – Indian Rupee (USDINR), Euro – Indian Rupee (EURINR), Japanese Yen – Indian Rupee (JPYINR), Pound Sterling – Indian Rupee (GBPINR), and 3 USD pairs - Euro – US Dollar (EURUSD), Pound Sterling – US Dollar (GBPUSD), and US Dollar – Japanese Yen (USDJPY).

The currency futures and options witnessed participation from over 425 trading members, including banks, and 4.7 lakh clients. While the USDINR currency pair continues to be the most traded currency on the exchanges, its contribution to turnover has declined to below 80 per cent in the current fiscal year.

The USDINR Futures contracts, as well as the USDINR Option contract on NSE, are globally the largest contracts in their respective categories based on the number of contracts traded in the calendar year 2022, according to statistics published by the Futures Industry Association (FIA), a derivatives trade body.

On this momentous occasion, Shri Sriram Krishnan, Chief Business Development Officer, NSE said, “I take this opportunity to thank The Government of India, Securities Exchange Board of India, Reserve Bank of India, Financial Benchmarks India Ltd, trading members, investors, industry associations and all other stakeholders. The success of currency derivatives is a culmination of the collaborative effort of all the stakeholders. NSE will continue to make efforts on its part for the development of the currency derivatives segment. I urge all the stakeholders to continue to provide us with their valuable feedback, suggestions, and guidance as always and embark on the journey of market development.”

About National Stock Exchange of India Limited (NSE):

The National Stock Exchange of India (NSE) is the world’s largest derivatives exchange by trading volume (contracts) as per the statistics maintained by the Futures Industry Association (FIA) for the calendar year 2022. NSE is ranked 3rd in the world in cash equities by number of trades as per the statistics maintained by the World Federation of Exchanges (WFE) for the calendar year 2022. NSE was the first exchange in India to implement electronic or screen-based trading. It began operations in 1994 and is ranked as the largest stock exchange in India in terms of total and average daily turnover for equity shares every year since 1995, based on SEBI data. NSE has a fully integrated business model comprising exchange listings, trading services, clearing and settlement services, indices, market data feeds, technology solutions and financial education offerings. NSE also oversees compliance by trading, clearing members and listed companies with the rules and regulations of SEBI and the exchange. NSE is a pioneer in technology and ensures the reliability and performance of its systems through a culture of innovation and investment in technology.