NSE Launches Weekly Currency Futures on USDINR

Monthly currency futures contracts on USDINR are one of the oldest and most popular currency futures contracts traded on the NSE. To make the markets for USDINR futures deeper and more liquid, NSE has now launched weekly currency futures on the USDINR. Normally, USDINR futures are bought when the trader is positive on the dollar and the USDINR futures are sold when the trader is negative on the dollar.

The mock trading for the weekly USDINR futures was conducted on 09-Oct and the trading was officially launched on the NSE on 11-Oct. The trading has commenced with 3 weekly contracts comprising of the near-week, mid-week and the far-week. In addition, NSE has also permitted trading in two spread contracts across different maturities.

The table below captures the weekly USDINR contracts to begin with.
 

In addition, there will be 2 spread contracts made available as under.
 

In the equity futures market, weekly options on the Nifty and the Bank Nifty are extremely popular and also very liquid. It is hoped that the introduction of weekly futures in the currency markets will be instrumental in bringing more participation and depth to the currency futures trading in India. Weekly futures tend to be lower on the risk scale.

On the first day of trading on 11-Oct, the volumes were fairly robust and there appeared to be a lot of trading interest in this relatively lower risk product. According to data put out by the NSE, a total of 122 members participated in the trading of weekly USDINR futures and a total of 1.43 lakh contracts got transacted on the day. The total value of the trading in weekly USDINR futures on the day of launch stood at Rs.1,080 crore.

While the USDINR remains the most popular rupee pair in terms of volumes and OI, the exchange also offers pairs of GBPINR, EURINR and JPYINR. In addition to these four rupee pairs, the exchange also offers 3 cross-currency pairs viz. EURUSD, GBPUSD and USDJPY.