Currency derivatives turnover up 13% on NSE, MCX-SX in Jan

After a nearly six-month lull, currency derivatives turnover on two stock exchanges, NSE and MCX-SX, surged by nearly 13% to Rs 3.09 lakh crore in January.

Total currency derivatives turnover of the two bourses stood at Rs 2.73 lakh crore in December, 2013.

Besides, the number of currency derivatives contracts on the two exchanges also jumped by nearly 12% to 4.74 crore in January as against 4.23 crore in the previous month, the Sebi data showed.

The currency derivatives turnover of the two bourses had been continuously declining since July 2013, following Sebi's move to tighten the exposure limits for currency derivatives to check large scale speculations in the capital market and help government stem fall in rupee value.

Another bourse USE witnessed rise in currency derivatives turnover for the second straight month in January. The turnover rose by nearly 14% to Rs 21,669 crore while number of contracts grew by 10.3% to 31.81 lakh during the month.

The National Stock Exchange (NSE) saw 12.1% increase to Rs 2.08 lakh crore in the currency derivatives turnover in January compared to Rs 1.86 lakh crore in December 2013, according to the Sebi data. The number of contracts rose by 11.45% to 3.21 crore in the month.

The monthly turnover of MCX-SX in the segment increased by 14.5% to Rs 1 lakh crore in January from Rs 87,641 crore in December. More than 1.5 crore contracts were traded on MCX-SX in January as against 1.35 crore in previous month.

Since July 2013, the exposure to currency contracts for a broker had been capped at 15% of his overall exposure or $50 million, whichever is lower.

For clients, this cap is 6%, or $10 million, whichever is lower.

Currency derivatives allow investors to take position on change in the foreign exchange rates between pairs of two currencies, such as rupee and dollar.