Free Press Journal

RBI mulling interest rate futures for gilts other than 10-year


RBI interest rates

RBI interest rates

Mumbai: The Reserve Bank of India is considering the introduction of interest rate futures for government bonds of tenure other than 10 years, a senior central bank official said today.

“We are encouraging active participation in interest rate futures for hedging purposes. We are encouraging banks, mutual funds, etc.

And introduction of interest rate futures on other tenors is also being considered,” K.K. Vohra, principal chief general manager, Internal Debt Management Department, said in a speech at an Indian Merchants’ Chamber event.

The RBI announced the introduction of 10-year interest rate futures contracts in October, with detailed directions in December.

Separately, R.N. Kar, chief general manager-in-charge of the foreign exchange department of the central bank, said at the same event that the RBI was not targeting any particular level for the rupee’s exchange rate.

He said that while the central bank was committed to a flexible exchange rate regime, it would act to prevent any “undue volatility” in the rupee.