THE FOREIGN CURRENCY FUTURES MARKET IN INDIA - SOME REFLECTIONS ON ITS GROWTH AND PERFORMANCE

The exponential growth of the Foreign Exchange Futures Market in India has been very sensational. Such an unruffled growth can be attributed to the robust interest in the trading of foreign exchanges in recent times which was well supported by market factors like lower transactions cost and stiff competition exhibited by a number of rival trading platforms offering the same product. Foreign Exchange is the largest liquid market in the world in terms of the cash value traded which exceeds $5.1 trillion per day (April 2016, Bank for International Settlements, Triennial Central Bank Survey). However currency futures trading accounts for only 4.11 % of the total foreign exchange daily turnover with $210 billion per day. The average daily turnover in Indian futures exchanges stands at Rs. 20354.54 crores which is less than 1 per cent share of the daily turnover in the global foreign exchange futures market. With more than a decade since the inception of the exchange traded derivatives segment in India, this paper makes an attempt to account for the growth and Performance of the exchange traded currency derivatives segment.