RBI ISSUES GUIDELINES FOR RUPEE INTEREST RATE DERIVATIVES

RBI has issued detailed norms for banks and primary dealers, asking them to trade in rupee interest rates derivatives only with those who understand the risks associated with the products. Derivatives are instruments to be settled at a future date, whose value is derived from change in interest rate, foreign exchange rate, credit rating, price of securities, or a combinatio. In money markets, rupee interest rate derivatives and foreign currency derivatives include interest rate swaps, forward rate agreement and interest rate futures.