NSE to launch 13-yr govt bond futures today

New Delhi: The National Stock Exchange (NSE) will on Tuesday introduce new interest rate futures (IRF) contracts on 13 year government bonds maturing in 2029.

Last week, BSE too had announced launch of a new IRF contract on January 10, offering 6.79 per cent central government security maturing on December 26, 2029.

An IRF contract is an agreement to buy or sell a debt instrument at a specified future date at a pre-determined price.

"Interest Rates Futures contracts based on 6.79 per cent central government security having maturity on December 26, 2029, will be made available for trading with effect Tuesday, January 10, 2017," NSE said in a circular.

The IRF market gets participation from retail investors, trading houses, foreign portfolio investors (FPIs) and other institutions.

The cash-settled IRFs provides market participants with a better option to hedge the risks arising from fluctuations in interest rates, which depend on various factors, including RBI policy, demand for liquidity and flow of overseas funds.