Singapore Exchange Continues to Grab Market Share in the Indian Rupee

With the Indian rupee outperforming other Asian currencies, trading of USD/INR futures have hit record levels at the Singapore Exchange.

When the CME and ICE announced that they were launching trading in Indian rupee futures at the end of 2013, the two exchanges were viewed as potential competitors to the strong activity in the currency being traded at the Dubai Gold and Commodity Exchange (DGCX). Despite the arrival of the US competitors, activity of Indian rupee trading at the DGCX has continued to be strong, with month volumes around $30 billion. That figure contrasts to the CME, where the rupee accounts for around $1 billion in monthly volumes.

Source: SGX
Source: SGX

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Rather than a competitor for the DGCX arriving from the West, it is in fact occurring from the East. Reporting a record in Indian rupee trading, the Singapore Exchange (SGX) has announced that during June, $9 billion of contracts were traded. In total, 286,959 USD/INR contracts were traded, a 26 times increase from the same period in 2014.

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According to the SGX, the rupee has become attractive to investors during 2015 due to its resilience against the US dollar, of which it has only declined 0.94% against the dollar for the year. This decline outperforms many other Asian currencies such as the Singapore dollar and Malaysian ringgit.

Looking ahead, SGX expects trading in the USD/INR to continue to be active as they stated today, “With the Federal Reserve expected to hike interest rates in September, volatility is likely to remain high going forward. The SGX INR/USD futures is one tool which offshore investors can use to manage currency risks associated with their exposure to the Indian market.”

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