BSE-CDX: BSE's new currency derivatives segment

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Mumbai, Oct 1: On Wednesday, Oct 1 Bombay Stock Exchange (BSE), one of oldest bourses in Asia launched currency derivatives segment (BSE-CDX) that would enable participants to hedge their currency risks through trading in the US dollar-rupee future platform.

Speaking after inaugurating the BSE-CDX terminal at BSE, Security and Exchange Board of India (SEBI) Chairman C B Bhave said ''SEBI and Reserve Bank of India (RBI) would hold discussions to bring about further relaxation in the currency trading norms as per the operators suggestion. RBI and SEBI are working together to relax the currency trading norms.'' He said ''The regulators have been trying to ensure transparency and timely settlement of transactions in the system, which is essential to develop a healthy financial system in the country.'' ''We have been trying to bring in assured settlement and transparency in the market, and the present financial crisis in the global markets is an outcome of lack of faith on these principles,'' Mr Bhave pointed out.

Earlier, participants had to depend on over-the-counter (OTC) products such as forwards, swaps and options to hedge their currency risks, he said.

Meanwhile, the RBI is watching the foreign exchange market as usual, said Shyamala Gopinath, deputy governor of the Reserve Bank, while speaking on the sidelines of the function.

''We are watching the markets, as we usually do monitor foreign exchange markets,'' she told reporters in response to queries whether the central bank had stepped up monitoring of the markets.

Before the BSE, the National Stock Exchange (NSE) was the first bourse in the country to start futures trading in forex exchange on August 29. The commodity bourse Multi Commodity Exchange of India (MCX) is expected to launch the facility soon.

In the opening deals, the partially-convertible rupee fell to a fresh five-year low of 47.00 per dollar, a level it had last tested on June two, 2003, before pulling back a bit due to heavy RBI intervention.

In the first hour of the opening session, the rupee was trading in the range of 47.10 and 47.15 against US dollar and business volume worth Rs 13.88 crore was transacted. It is likely to cross Rs 20 crore during the day, brokers said.


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