Corporates worry over post-clearing NDF liquidity

Clearing may raise cost of emerging market currency hedging


Corporate treasurers have expressed concern over the impact of central clearing on non-deliverable forwards (NDF), fearing rising trading costs could reduce liquidity in these contracts.

Under the US Dodd-Frank Act, NDFs are required to be traded via a swap execution facility (Sef) and will probably be subject to central clearing requirements as soon as this year.

Due to the volatile nature of the emerging market currencies that NDFs are used to hedge, market participants have repeatedly

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