SGX hits open interest record on Indian rates shift

This article was first published in Global Investor Group.

Singapore Exchange (SGX) has hit an open interest record on its Indian rupee/US dollar (INR/USD) futures, after a rising trend in the country’s interest rate over the last year has driven hedging demand.

 The Singaporean exchange group on Monday said that the 164,332 contracts traded in the futures on June 26 marked a new record. The tally beats the 144,162 lot level it hit on April 22. That record was hit ahead of a 250 basis point increase in its main repo rate between May last year and February, from 4%.

 “Record open interest positions in INR/USD is a by-product of buyside users focusing on risk management and hedging activities right now,” John McGrath, chief revenue officer at BidFX, owned by SGX, said in a notice. “After all, as opposed to trading currency markets for alpha, most investment managers are looking for ways to manage risk around their currency exposures.

 “Growing interest in INR/USD futures shows that the buyside are turning to venues with deep liquidity to manage their currency exposure amid ongoing market uncertainty.”

 The new record means that the equivalent of $4.1 billion (£3.2bn) were held in the contracts leading into the end of the month’s trading.

SGX’s partnership with India’s National Stock Exchange for equity futures was a key strategic pillar for chief executive Loh Boon Chye as he spoke to Global Investor in May.

ETD supplies futures and options instrument data for over 100,000 contracts on over 110+ exchanges – contact us to request a sample or to discuss your derivatives data needs.


Related Insights

  1. Article
    The use of reference data is not always an ‘after the event’ activity for reporting purposes. Futures and options reference data in particular is not only instrumental but also mission critical in price discovery for forward-priced transactions. As such, any problem with this data, whether at source , in its delivery to an end user application, or because of a ‘glitch in the matrix’ on the end user side , can cause major headaches.
  2. Article
    UK regulatory authorities have launched a consultation on changes to technical standards that govern margin requirements for uncleared derivatives.
  3. Article
    The UK Financial Conduct Authority (FCA) will canvass opinions about derivatives transparency rules “later this year”, after pressing ahead with plans to introduce a bond and equity consolidated tape (CT).