The Bombay Stock Exchange said it has received approval to launch interest rates futures on overnight Mumbai Inter-Bank Offer Rate.
The bourse has received clearance from the Securities and Exchange Board of India and the Reserve Bank of India, according to a release.
Mibor is the interest rate at which banks borrow from one another for short term purposes. Financial Benchmarks India Pvt. Ltd. announces the overnight Mibor on a daily basis and it is computed by the Clearing Corporation of India Ltd..
“With the opportunity to introduce interest rates futures on overnight Mibor, market participants will be able to forecast and manage interest rate risk on the BSE,” Managing Director and Chief Executive Officer Ashishkumar Chauhan said.
Mibor rate is based on trade-weighted inter-bank call money transactions on the Negotiated Dealing System call platform of CCIL between 9 a.m. and 10 a.m.
“The reference rate is based on the actual traded rates as opposed to polled rates thus acting as an important tool that helps institutions manage interest rate risk,” the release said.
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