I. J. of Business & Management Research
Research Article
A Review Report on Interest Rate Derivatives in India
Author(s) : Dr. P. Vidhya Priya* and Dr. M.Mohanasundari
Publisher : FOREX Publication
Published : 30 June 2015
e-ISSN :2347-4696
Page(s) : 11-14
Abstract
After taking off with a bang, volumes in the Interest Rate Futures (IRF) market in India have slowed down. The financial crisis has also underscored the weaknesses in the OTC derivatives markets which need to be addressed for building a resilient financial system that is less prone to instabilities. But any corporate debt market suffers from an inherent interest rate risk-one of the most pervasive risks in any economy. The increasing importance of interest rate risk for the corporate sector in a deregulated interest rate environment is widely appreciated. A way to hedge against such a risk is to use an interest rate future. This paper seeks to examine if the current trend in interest rate derivatives trading is indeed worrisome; and if so, what could be the likely causes and the issues related to OTC traded interest rate derivatives in India.
Keywords: Interest rate derivative, Interest rate futures, OTC trading, Interest rate risk
Dr. P. Vidhya Priya*, Associate professor Department of management studies Kongu Engineering College; Email: vidhpi@gmail.com
Dr. M.Mohanasundari, Assistant Professor Department of management studies Kongu Engineering College; Email: monasobee@gmail.com
[1] John C. Hull, Options, Futures and Other Derivatives (6th ed.), (Prentice -Hall, 2005).
[2] Frank Fabozzi and Moorad Choudhry, the Handbook of European Fixed Income Securities, (John Wiley, 2004).
[3] Brealey, Myers, and Allen. Principles of Corporate Finance, 8th edition (McGraw- Hill/Irwin, 2005).
[4] Report of the RBI – SEBI Standing Technical Committee on Interest Rate Futures (June 2009): http://rbidocs.rbi.org.in/rdocs/PublicationRes.
Dr. P. Vidhya Priya and Dr. M.Mohanasundari (2015), A Review Report on Interest Rate Derivatives in India. IJBMR 3(2), 11-14. DOI: 10.37391/IJBMR.030201.