Comments
Leading stock exchanges BSE and NSE will launch new interest rate futures (IRF) contracts offering 7.17 per cent yield on government bonds, from Thursday.
The 10 year-bonds would mature on January 8, 2028, BSE and NSE said in separate circulars.
An IRF is a contract between a buyer and a seller agreeing to the future delivery of any interest-bearing asset such as government bonds.
The cash-settled IRFs provide market participants an option to hedge risks arising from fluctuations in interest rates, which depend on various factors, including RBI policy, demand for liquidity and flow of overseas funds.
“Interest Rates Futures contracts based on 7.17 per cent central government security having maturity on January 8, 2028 will be made available for trading with effect from Thursday, January 11, 2018,” the circulars said.
Banks, primary dealers, mutual funds, insurers, FIIs, corporates and brokers, as well as retail investors trade in this product.
Comments
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.