Currency futures picking up in northern region

Stock brokers of national repute and regional brokers having presence in the northern region are upbeat over the exchange-traded currency futures, which is being used to hedge against the risk of rate volatilities in the foreign exchange markets. They are of the view that the currency futures market in the northern region is picking up and more and more exporters, importers and professionals are joining the bandwagon to hedge against the risk of rate volatilities.

Further, to cash in on the opportunity, brokers are organising sensitisation seminars, besides individual meeting with prospective customers.

Speaking to Business Standard, Director, Vikson Securities V Kumar said, “As significant number of exporters and importers are based in this part of the region, the currency futures has huge potential. Basically our clients are corporate, including importers, exporters etc. They use it as a hedge tool to overcome volatility. In the last few months many of our clients were benefited by the currency futures, to further attract prospective clients we are organising seminars in association with respective stock exchanges, besides personnel meetings.”

Recently, The Reserve Bank of India (RBI), along with the Securities and Exchange Board of India (Sebi) announced that recognised stock exchanges that currently offered futures trading in Dollar-Rupee could launch futures trading in Euro-Rupee, Pound Sterling-Rupee and Yen-Rupee with immediate effect. Market analysts maintained that the launch of additional currency pairs was a natural extension since exporters, importers and investors needed to take cover against other currencies as well.

“The introduction of new currency pairs will go a long way in helping market participants, especially international traders, hedge against cross-currency volatility and mitigate risk in export and imports across all major traded currencies,’ said MCX Stock Exchange Limited, AVP, Pulak Basak.

Echoing similar sentiments, Director of Ludhiana-based Master Trust Ltd, one of the largest regional broking houses, Gurmeet Chawla said, “It is picking up and in next two years, I perceive the daily turnover of the currency futures market would match the daily turnover of the commodity market.”