Currency derivative turnover rises 25% in first half of FY'14
Mumbai: The currency derivative turnover on the country's three bourses rose 25 percent to about Rs 48.50 lakh crore in the first six months of 2013-14 despite Sebi's move in July to tighten the exposure limits in the segment.
The currency derivative turnover on the three stock exchanges -- NSE, MCX-SX and USE -- stood at Rs 38.77 lakh crore during the April-September period in 2012-13, as per the latest data available with the Securities and Exchange Board of India (Sebi).
Moreover, the volumes of currency derivatives trading on the three stock exchanges also grew by nearly 16.3 percent at 81.46 crore in the first half of the current fiscal compared to the same period year-ago.
In early July, 2013, Sebi had tightened the exposure limits for currency derivatives to check large scale speculations in the securities market and help government stem fall in rupee value.
Individually, the turnover of currency derivatives at NSE increased to Rs 28.49 lakh crore in April-September 2013-14, from Rs 23 lakh crore in the same period year-ago.
The number of currency derivative contracts on NSE rose to nearly 48 crore in the period under review.
Besides, MCX-SX, the country's newest bourse, recorded a currency derivative turnover growth at Rs 18.72 lakh crore, while its volumes also increased to 31.38 crore, in the first six moths of the current fiscal.
Similarily, the turnover for USE stood at Rs 1.28 lakh crore substantially higher than Rs 8,135 crore recorded in April-September period in 2012-13. The number of contracts also rose manifold on the bourse to 2.12 crore.
As per Sebi's directive, the exposure to all currency contracts for a broker had been capped at 15 percent of their overall exposure or USD 50 million, whichever is lower.
For clients, this cap is 6 per cent, or USD 10 million, whichever is lower.
Currency derivative contracts allow investors to take position on change in the foreign exchange rates between pairs of two currencies, such as rupee and dollar.