- DGCX hosts educational workshop on Indian Rupee-Dollar Futures
- Event sparks interest among local participants for using Indian Rupee-Dollar Futures to hedge exchange rate risk
- Recent volatility of up to 40% in the Indian Rupee
Strong interest and appetite for the DGCX Indian Rupee futures contract was displayed this week at an education event hosted by the Dubai Gold & Commodities Exchange in Dubai.
Malcolm Wall Morris, Chief Executive Officer DGCX, addressed participants at an educational seminar this week, jointly hosted by the exchange and brokerage firm, Richcomm Global Services.
“We have seen increased interest from market participants in the Indian Rupee-Dollar futures contract in recent months, with volume up 34% compared with the same period last year.
As the only exchange-traded Rupee futures contract outside of India, it opens numerous trading opportunities to both local and international participants. The contract is favoured among traders, arbitrageurs, importers, exporters, and local businesses”, added Malcolm Wall Morris.
The seminar is part of the exchange’s recent initiatives with members such as Richcomm to step up awareness about the benefits of trading Indian Rupee-Dollar futures.
“The DGCX Indian Rupee futures contract is a natural extension of the forwards market and meets the market’s needs by offering a significantly lower cost and safer method to trade the currency. The DGCX contract provides several advantages, the most significant being transparency and guaranteed settlement for market positions”, said Kevin Flanagan, Chief Operating Officer, Richcomm Global Services, a Broker Member of DGCX.
India’s rapidly growing trade flows, increased cross border investments and the fluctuation in exchange rates, have created a corresponding requirement to hedge risk. Recent volatility in the Indian Rupee compared to the US Dollar has been as high as 40%, which can leave businesses and individuals exposed. DGCX offers the financial tool to manage this price risk in the Indian Rupee.
India became the top trading partner for the UAE in 2008 and many individuals and businesses have exposure to volatility in the Indian Rupee-Dollar rate. Trade between the two countries reached US $29.1 billion in 2007-08. Exports from India were US $15.63 billion while imports to India were US $13.47 billion. (Department of Commerce, Government of India).
The DGCX Indian Rupee-Dollar futures contract is available for trading between 8:30 am and 11:30 pm UAE time and settlement is based on the US Dollar reference rate published by the RBI in Mumbai.
Year to date volume for the DGCX Indian Rupee-Dollar futures is 6,015 contracts, valued at US $241 million, an increase of 34% compared with volume during the same period last year. Trading the contract via the well regulated and secure environment of an exchange and clearing house provides guaranteed settlement and therefore eliminates counterparty credit risk, with both trading and clearing activity occurring in Dubai.
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