Indian currency contracts are booming with the most traded contracts changing hands hundreds of millions of times a year. Galen Stops travelled to Mumbai to find out the reasons behind the success of the contracts and who is trading them.
Indian currency contracts are
among the most traded derivatives contracts in the world
despite the immaturity of the market and the fact that the
Indian markets are closed to foreign traders.
A combination of the Indian
regulators ensuring that these contracts are affordable to
smaller investors, rapid growth in India’s export
and import industry, sustained volatility in the value of the
rupee and the second largest population in the world have
propelled the volumes of exchange traded currency derivatives
But should the import and export
industry continue to grow and the Indian regulators and
exchanges find a way to involve a broader range of the
population in the financial markets then we could soon find
that these current volumes are just the beginning.
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