Metropolitan Exchange gets nod to launch weekly IRFs

Mumbai: The Metropolitan Stock Exchange of India (MSE) has become the first exchange in India to gain regulator Securities Exchange Board of India’s (Sebi) approval to launch weekly interest rate futures (IRFs). The move will help to grow the monthly IRF market by weekly convergences to interest rates.

The Indian fixed income market now has the ability to hedge market risk exposure from shortterm policy moves, most importantly, ones such as RBI policy rate decisions without having to deploy month-long futures positions that would have other dynamics at play.

Weekly IRFs would have weekly convergences to interest rates. Hence, short-term speculative spread trading on interest rate futures, especially during periods of rate volatility, should logically commence and create a new, potentially highly profitable avenue of income for market participants.


The presence of weekly IRFs will span the market, creating more avenues for hedging and speculation than those that exist with monthly IRFs, while providing intermediate tenor continuity within the month, thereby enhancing the effectiveness of the monthly IRF market.