Dubai to trade rupee futures

The futures exchange in the Gulf Arab emirate of Dubai said on Wednesday it would begin trading Indian rupee contracts within two months to cater for India's growing share of international trade and investment.

The Dubai Gold and Commodities Exchange (DGCX) launched the Middle East's first currency futures in June, trading euro-dollar, yen-dollar and sterling-dollar contracts.

Each non-deliverable rupee-dollar contract will represent 2 million rupees ($46,710), DGCX said in a statement. Prices will be quoted in U.S. cents per 100 Indian rupees.

"The Indian rupee futures contract will be of use to traders who import into, and export from, India, together with others who remit funds to India," DGCX said.

The maximum price fluctuation will be $2 per contract, DGCX said, adding it would offer contracts in the current and following two calendar months.

The UAE, the Arab world's second-largest economy, now ranks third after the United States and China in terms of India's annual two-way trade.

It wants to become India's leading trading partner, its prime minister said in March. Foreigners make up 85 percent of the UAE's population of about 4.1 million, most of them from South Asia.

The DGCX is based in Dubai, the Arab world's commercial hub and one of seven emirates in the United Arab Emirates federation.

The exchange, which also trades futures contracts in gold, silver and fuel oil, plans to introduce gold and silver options and futures contracts for cotton, freight rates and assorted pulses in 2007.

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