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Merrill Preps Rupee I-Rate Trading Book

05 Oct 2003

DSP Merrill Lynch is establishing an onshore Indian rupee interest rate derivatives desk and is looking to begin trading by year-end. "The Indian market is still in development mode," said Jayesh Mehta, head of debt in Mumbai. "There's lots of potential," he added.

Mehta noted that the firm is planning its debut in the swap market as there is now sufficient liquidity and further liberalization is impending. The firm recently received internal approval and is now establishing systems for the effort. "We might be a little late but we wanted to insure that there is enough depth," he continued.

The Indian interest rate market opened in 1999 (DW, 5/25), with such players as ABN AMRO, Citigroup, Deutsche Bank, HSBC and Standard Chartered leading the way.

DSP Merrill will initially trade both MIFOR (Mumbai Implied Forward Offer Rate) and the overnight indexed swap rate. "Our intention is to begin with vanilla swaps and move into exotics," continued Mehta. He added that the firm will likely bring in an additional trader for its fixed income desk.

05 Oct 2003