EM in Focus at SGX as INR Hits Record

Open Interest (OI) positions on INR/USD futures at the Singapore Exchange (SGX) have hit a new record at 164,332 lots, which amounts to $4.1 billion, on 26 June, some 16.4% higher than the last OI record on 22 April 2022.

SGX says the record positions come as risk management and hedging activity continues to increase among investment managers in the region following India’s interest rates rising to 250bp from 4% roughly a year ago.

“Record open interest positions in INR/USD is a by-product of buy side users focusing on risk management and hedging activities right now,” says John McGrath, chief revenue officer at SGX’s BidFX. “After all, as opposed to trading currency markets for alpha, most investment managers are looking for ways to manage risk around their currency exposures. Growing interest in INR/USD futures shows that the buyside are turning to venues with deep liquidity to manage their currency exposure amid ongoing market uncertainty.”

Earlier this month, SGX reported notional FX futures volume for May at $206.6 billion, a 4.3% rise on the same month in 2022 and around $9 billion per day. Aggregate OI for May was $14.5 billion, or 233,871 contracts, which is a 7% year-on-year rise.