Sebi to allow currency options soon

Market regulator the Securities and Exchange Board of India (Sebi) today said it would allow more currency derivatives products beginning with options soon.

"It is almost near final stages of deliberation (on currency options introduction). So it can come at any time," Sebi whole-time member K M Abraham said on the sidelines of an event organised by industry body Assocham.

Currency option is a derivative instrument which gives the owner the right, but not the obligation, to exchange money denominated in one currency into another currency at a pre-agreed exchange rate on a specified date.

It is yet to get approval from the Sebi board, he said. Sebi had launched currency derivatives in India in August, 2008, a month before the global financial crisis hit the world. Initially, the currency futures were limited to rupee-dollar only, but later they were extended to other pairs.

Asked if more products can be introduced, he said, "A lot of thinking is going on as to what could be route for other products to be brought in." However, products should be suitable for Indian conditions and regulatory boundary, he added.

Talking about financial inclusion, he said that it is very critical for the poverty alleviation in the country.