Banks arbitrage INR futures
MUMBAI - Analysts are seeing a rise in arbitrage trading by public sector banks in India, which are looking to take advantage of the price discrepancy between over-the-counter forwards prices and the country's nascent foreign exchange futures market.
"Assuming the Indian rupee spot is 47.45 and the premium for the July month is 0.19 paise, this is effectively 47.59 in the OTC markets. If the July futures is trading at 47.65, the bank buys it in OTC and sells it on the future, pocketing six paise
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