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Our Bureau

Coimbatore, Aug. 29 Trading in dollar-rupee forex futures was launched on Friday by Coimbatore Capital Ltd(CCL), a member of National Stock Exchange (NSE).

Mr D. Balasundaram, Chairman, CCL, said that exchange traded currency futures was a boon to exporters and importers as it would help minimise the risk from the fluctuations in the exchange rate of the two currencies. The small and medium companies in Coimbatore would benefit from the availability of prices over a 12-month period though most trading will be confined to the contracts of close to three months.

He said CCL would conduct awareness meetings on the exchange traded currency futures at major cities in Tamil Nadu. Already a meeting was held in Tirupur and meetings would be held in Karur and Coimbatore in the coming weeks.

Till now the exporters and importers were using forward contracts through banks for reducing the foreign exchange risk. This was called OTC Market.

Exchange Traded Futures have many advantages over forward contracts such as better exchange rate, facility to enter into the contract at a time of one’s choice (similarly exit when one liked), transparency in the exchange rate, smaller size of contract and not being limited to one bank or forex dealer.

The Exchange Traded USD/INR futures would be completely transparent in its characteristics and the entire settlement procedure will be made available at the beginning of the trading itself.

Mr G. Kannappan, Managing Director, Sharadha Terry Products Ltd, launched the trading, according to a release from CCL.

More Stories on : Derivatives Markets | Financial Services | Tamil Nadu

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