Vol. 3, Issue 4, Part H (2017)

Often one is led to wonder whether with the exchange traded currency derivatives market of India, it is a case of one step forward and two steps back. One would be right in making such a statement given that a reform announced by the regulator is invariably accompanied by a rider and the two, namely the reform and the rider, seem to be pulling the market in opposite directions. The result is that the market remains more or less where it was, even after the so-called reforms are implemented.

The researcher believes that the first and foremost job of the regulator should be to ensure thatthe biggest chunk of the currency market, if not the entire currency market, is brought onshore. Once that is done, the other benefits will automatically accrue to all the stakeholders associated with the market.