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33 Currency Derivatives Market Through trading in currency derivatives, the stakeholders can hedge against foreign exchange risk and benefit from the Rupee’s movements against major foreign currencies. There has been significant increase in volumes of trading in currency derivatives over the years. The Euro, Japanese Yen, British Pound and US Dollar are the major currencies for which currency derivatives are paired with the Rupee. Besides, cross currency pairs are now allowed to be traded. Presently, in Indian markets, currency derivatives are traded on BSE, NSE, and MSEI. The aggregate turnover in the currency derivatives segment at the exchanges increased by 2.9% from ` 159.2 trillion during FY19 to ` 163.8 trillion in FY20. The turnover of NSE grew by 13.3% during FY20, while the turnover of BSE and MSEI declined by 9.1% and 4.1%, respectively during the period. During FY20, the total turnover was the highest at NSE ( ` 96.5 trillion), followed by BSE ( ` 66.8 trillion) and MSEI ( ` 0.45 trillion). NSE accounted for 58.9% of the total turnover in the currency segment followed by BSE (40.8%) and MSEI (0.3%). Trends in Interest Rate Derivatives Interest-rate derivatives are often used to hedge risk by institutional investors, banks, companies and individuals to protect themselves against changes in interest rates and they can also be used to increase or refine the holder’s risk profile. During FY20, the aggregate turnover in the Interest Rate Derivatives (IRD) segment across all exchanges increased by 29.2%. The gross turnover in IRD segment of NSE increased by 47% to ` 3,608.1 bn in FY20 as compared with ` 2,454.1 bn in FY19. The gross turnover in IRD segment of BSE fell by 10% to ` 1,000.5 bn in FY20 from ` 1,112.2 bn in FY19. However, there was no trading activity reported in the IRD segment of MSEI during FY19 and FY20. Dun & Bradstreet