Singapore Exchange Limited (SGX) is now stealing India’s thunder in the trading of rupee. Trading against the dollar saw a 63 per cent year-on-year growth on SGX, with November being the second-best month for it since the contracts were launched four years ago. The INR/USD futures volume topped $29 billion on SGX, data from the exchange showed.

The aggregate SGX INR/USD futures volume for November was up 18 per cent on a month-on-month basis with 967,836 contracts against 823,149 contracts in October. This translates to $29.8 billion in notional value, making November the second best month on record. A record of 999,971 contracts was set in September 2017.

Trading volumes

Trading in INR/USD futures has continued to grow and remains above a high threshold of $1 billion per day. The average daily volume (ADV) over the last 3 months rose to nearly $1.4 billion at the end of November. The sustained trading interest in SGX INR/USD futures saw trading cross $1 billion for 19 days in November, up from 18 days in October.

“November was a tale of two divergent macro themes driving the Indian rupee very distinctly in the two halves of the month. The currency declined early in the month as surging crude oil prices sparked concerns about higher import bills and higher inflation. The sovereign bonds declined amid expectations of quickening inflation and a higher budget deficit. The rising bond yields led to a net outflow of foreign funds from bond markets, putting additional pressure on the rupee that depreciated by 59 paisa in the first half of the month,” a note from SGX said.

Such trading volumes in the Indian rupee in Singapore has put to shame government efforts to promote Gujarat-based GIFT city as an onshore-tax haven, experts said.

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