DGCX, the first exchange in the world to trade a rupee derivative, already trades in three currency contracts such as euro/US dollar, pound sterling/US dollar and Japanese yen/US dollar.
In addition, the Dubai-based exchange, promoted by India's leading commodity bourse - the Multi-Commodity Exchange - in collaboration with the Dubai Multi Commodity Centre trades in three commodities futures contracts such as gold, silver and fuel oil.
"The DGCX rupee contract can be viewed as a natural extension of the non-deliverable forward inter-bank
market that already exists in various financial centres," said Colin Griffith, DGCX chairman and executive director of the DMCC.
However, he said the DGCX futures market has advantages over the NDF market, such as transparency of price discovery and the benefits of centrally cleared market positions.
The rupee contracts will be non deliverable in rupees while the settlements will be done in US dollars.
Griffith said the purpose of this contract is efficient price discovery rather than actual delivery based settlements.
"Rupee futures contract will be of use to traders banks and remittance agencies," he added.
