The National Stock Exchange of India is believed to have received market regulator, Securities and Exchange Board of India's approval for trading in currency futures.

The country's largest stock exchange in terms of volume has 'received an in-principle nod from Sebi for starting an exchange to trade foreign currency derivatives,' sources close to the development said.

NSE officials, however, were not available for comment.

Recently, on August 7, joint panel of RBI and Sebi had decided to introduce currency futures in stock exchanges, to manage volatility in the value of rupee.

Accordingly persons who are residents of India are permitted to trade in futures. They would be allowed to purchase or sell currency futures for hedging their exposure to foreign exchange rate risk.

Currency futures is a forex derivative contract to buy or sell one currency against other on a specified future date, at a price decided in the contract.