NSE, BSE to launch new 10-year bond futures on Monday

Leading stock exchanges NSE and BSE, today said they will begin trading in interest rate futures (IRF) with tenures of one-three months, with underlying of 10-year government bonds.
"Interest Rates Futures contracts based on 8.40 per cent central government security maturing on July 28, 2024 will be made available for trading with effect from Monday, August 4, 2014," the NSE and the BSE said in similar-worded circulars.
An IRF is generally a contract between a buyer and a seller agreeing to the future delivery of any interest-bearing asset such as government bonds.
The cash-settled IRFs will provide market participants with better option to hedge risks arising from fluctuations in interest rates, which depend on various factors, including RBI policy, demand for liquidity and flow of overseas funds.

Earlier this year, the stock exchanges had introduced cash settled IRFs on 10-year government bonds.
IRF at NSE today recorded a turnover of Rs 14,123.23 crore, while it had registered a turover of Rs 6,760.56 yesterday.