| Foreign institutional investors unlikely to get a look-in. |
| The Reserve Bank of India (RBI) is exploring a dedicated currency futures exchange, after taking an in-principle decision to launch rupee-denominated futures. |
| In its meeting with market participants in Juyly, the RBI has also decided to revive interest rate futures which have failed to take off after being introduced in June 2003. |
| The central bank is not in favour of currency futures being traded on stock or commodity exchanges as they are regulated by the Securities and Exchange Board of India and Forward Markets Commission (FMC), respectively. |
| This could dilute RBI’s regulatory power on domestic foreign exchange market which, in turn, could have implications on exchange rate management — RBI’s sole prerogative. |
| Moreover, the discussion also highlighted the legal issues if futures are allowed on commodity exchange as it happens internationally or on stock exchanges like NSE or BSE. |
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