Derivatives professionals are predicting the onshore interest rate options market in India will get the green light within six months. Srinivasan Varadarajan, treasurer at JPMorgan in Mumbai, said the instruments will likely get the go-ahead before the second quarter of next year after the nascent interest rate swap market matures further. A trader at Bank of America pinpointed the timing to likely be at the Reserve Bank of India's credit policy meeting in April. Alpana Killawala, spokeswoman at the RBI in Mumbai, did not return calls.
The recent introduction of onshore foreign exchange options (DW, 7/13) has given bankers hope that interest rate options will be next. Major players, including Deutsche Bank and JPMorgan, have been asking the RBI to permit caps, floors and swaptions since last year (DW, 6/30/02).
