HKEX to Launch INR Futures

Hong Kong Exchanges and Clearing (HKEX) has announced it will launch Indian rupee (INR) currency futures in the fourth quarter of this year.

The exchange it plans to introduce two new contracts: the INR vs US Dollar (INR/USD) futures; and the INR vs Renminbi traded in Hong Kong (INR/CNH) futures, adding the INR/CNH Futures contract will be the first of its kind globally.

“The launch of the INR Currency Futures is part of HKEX’s ongoing strategic commitment to bolster Hong Kong’s role as the region’s premier FX and fixed-income trading hub,” says Julien Martin, HKEX’s head of fixed income and currencies. “We are pleased to further extend our FIC product offering and to provide market participants additional risk management tools on a broader range of currencies.”

HKEX launched its first currency futures contract, in USD/CNH in 2012, and says nearly 140 brokers are offering its FX products to a diverse group of customers. Trading in currency derivatives products is open during the day trading session as well as an after hours session, which recently added two further hours of trading, to end at 3 am Hong Kong time.

In addition to the USD/CNH Futures, HKEX also offers contracts with the CNH vs the Australian dollar, the Euro, and the Japanese yen. In 2017, it also launched USD/CNH options contracts.
The launch date of INR Currency Futures will be announced in due course, and is subject to regulatory approval.

With the launch HKEX will be hoping to eat into the dominant market share held in south-east Asia by Singapore Exchange (SGX). In RMB futures HKEX says it averaged just under 8,500 contracts per day in the seven months to July 2019, while SGX, with the same contract size, averaged around 35,000 per day. The INR contracts at SGX are the most traded FX product on the exchange, with average daily turnover in the region of 50,000 contracts.

Colin Lambert

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