The combined volumes of the USD/INR futures in Singapore and Dubai is almost 1.75 times of the USD/INR futures business in Indian exchanges.Since dollar-rupee futures contract is not a proprietary product, offshore markets like Dubai had launched the contract despite objections from RBI. "The USD-INR trade begins before the Indian market opens and continues even after trading stops in the Indian market. Given the trading hours in GIFT, there are chances that some of the currency futures volumes may shift from Dubai and Singapore to GIFT. They can easily set up shop in GIFT, and there can be arbitrage trades between regular Indian exchanges like NSE/BSE and GIFT bourses," said a veteran in the foreign exchange market. "Currency futures in GIFT may impact Dubai more than Singapore.
Source: Economic Times February 13, 2018 01:52 UTC