28.08.2008 - Rupee futures: a wise move?
From Livemint.com: Hailed as the next big step in giving financial depth to markets, there may be unseen perils in taking it. The National Stock Exchange will launch rupee futures tomorrow. Traders, derivatives experts and many others are eagerly awaiting, and cheering the debut. A Reserve Bank of India (RBI) internal working group last November recommended these futures be introduced. This recommendation got a boost from the draft report on financial sector reforms (Raghuram Rajan report) this April. The Rajan report backing for currency futures (proposal 14) was part of a well-thought-out package. Its set of recommendations in this context are: (a) inflation targeting as the single objective of RBI, (b) a flexible exchange rate and (c) high/full capital account convertibility, with full currency and interest rate derivative markets to hedge the associated price risks..... Full Article: Source
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