NSE to launch weekly dollar-rupee derivatives contracts on December 3

The National Stock Exchange (NSE) on Monday said it has received Sebi's approval to introduce weekly derivatives contracts on USD-INR which it will launch from December 3.

The weekly derivatives contracts will help participants limit time-related premium costs, thereby offering effective protection for their foreign exchange exposures, NSE Managing Director and CEO Vikram Limaye said in a statement.

"Availability of USD-INR options contracts with both monthly as well as weekly maturities will offer market participants a flexible and precise hedging tool to manage their exposure and trade short-term market movements," he added.

All weekly options contracts will expire on Friday.

The contract size of USD 1,000 will be available for trading in the currency derivatives segment of the exchange.

The NSE said it has "received approval from Sebi to introduce weekly derivatives contracts on USD-INR. The launch date for the weekly USD-INR options is December 3, 2018".

The exchange launched trading in currency derivatives in August 2008 with the introduction of 12 monthly futures on USD-INR and subsequently three monthly and three quarterly options on USD-INR in October 2010.

This facilitated participants to hedge foreign exchange risk, brought transparency and provided a settlement guarantee.

On the NSE, market participants can trade futures and options on various currency pairs -- USD-INR, EUR-INR, GBP-INR, JPY-INR and cross currency pairs -- EUR-USD, GBP-USD and USD-JPY.

The currency futures average daily turnover increased 79 per cent from Rs 107.26 billion in 2017-18 to Rs 192.49 billion in 2018-19. During the same period, currency options average daily premium turnover surged 85 per cent from Rs 31.2 crore to Rs 576 million.