The currency derivatives turnover on the country’s three stock exchanges fell by 42 per cent to Rs 7.42 lakh crore in July, with the NSE and MCX-SX witnessing a slump for the first time in the current fiscal.
The three bourses — NSE, MCX-SX and USE — together recorded a turnover of Rs 12.80 lakh crore in June 2013, according to the latest data compiled by market regulator SEBI.
USE had witnessed a fall in its currency derivatives turnover in June as well, while the NSE and MCX-SX recorded their first monthly declines since April.
The volumes of currency derivatives trading on the three stock exchanges also plunged by nearly 44 per cent to 12.13 crore in July as against 21.6 crore in June 2013.
The decline follows the market regulator SEBI’s move in early July to tighten the exposure limits for currency derivatives to check large-scale speculation in the market and help the Government stem the fall in rupee value.
Individually, the monthly turnover of currency derivatives at the NSE fell by 47.2 per cent to Rs 4.09 lakh crore from Rs 7.75 lakh crore in June 2013.
The number of currency derivative contracts on the NSE nearly halved to 6.70 crore in July from 13.10 crore in June.
The monthly turnover of currency derivatives on MCX-SX decreased by 35.6 per cent to Rs 3.10 lakh crore in July 2013.
A little over 5 crore contracts were traded on the MCX, about three crore less than were traded in June.
The currency derivatives turnover for USE stood at Rs 21,896 crore in July, a drop of 3.1 per cent compared to the previous month. The number of currency contracts on USE declined 7.87 per cent to 35.80 lakh in July.
Since July 11, 2013, the exposure to all currency contracts for a broker was capped at 15 per cent of their overall exposure or $50 million, whichever is lower.
For clients, this cap is 6 per cent or $10 million, whichever is lower.
Currency derivative contracts allow investors to take positions on a change in the foreign exchange rates between pairs of two currencies such as the rupee and dollar.