Indian rupee volatility a boon to Dubai exchange

The recent volatility in the price of the Indian rupee has proved to be a boon for the Dubai Gold & Commodities Exchange (DGCX), which on Saturday said that it had witnessed its highest ever one-day volume of trading in futures contracts for the currency last month.

In a statement issued to the media on Saturday, DGCX said that 126,055 contracts totalling $4.17 billion were traded on the Indian rupee (INR) on August 13. It added that the total number of contracts traded on the exchange in August was more than 2.08 million, which is a 60 percent year-on-year increase. The exchange, which mainly trades gold, currencies and oil futures contracts (as well as on Indian and U.S. equities), has benefitted from increased volatility in many of its markets, leading to a 45 percent increase in volumes for the year-to-date.

Les Male, who became CEO of DGCX earlier this year, said in the press release: "DGCX performed exceptionally well in August, registering a record daily INR volume and continuing to achieve outstanding growth over 2017."

Male also highlighted a deal signed last month with Dubai Islamic Economy Development Centre to partner on the promotion of new Islamic financial products.
DGCX launched the first Shariah-compliant spot gold contract in March this year.

"We are confident that the relationship will provide us with a platform to launch further Islamic financial instruments as we work diligently towards positioning Dubai as the hub of Islamic markets activity,” Male added.

The Indian rupee fell to a new low of 70.09 rupees per U.S. dollar in trading on Friday. It is one of many emerging market currencies that have witnessed a sell-off from investors in recent weeks, which was initially sparked by concerns over Turkey's economy and expectations of interest rate increases in the United States.

Mihir Kapadia, founder and CEO of Sun Global Investments, said in a note on Thursday that a turbulent week for Turkey's economy last week meant the "Lira took another slide, with emerging markets feeling the effects".

"Investors are waiting on further developments on the country’s inflation plans before reacting to the markets. Many other EM currencies such as the South African Rand and the Indian Rupee have also come under pressure,” he said.