IRF’s or Interest Rate Futures is available to all investors from Aug 31. Its a form of derivatives which is used to hedge against interest rate risks. The NSE launched the IRF’s on the basis of a ten year government security and has waived transaction charges till December 31. The investors till now had no tool to make the benefit from the rise in the interest rates. this move would ensure that they do get a chance to make use of the rises of intrest rates in the bond prices. This new introduction to the market gives strong signal that more tools like this would be introduced into the market.

With the introduction of IRF’s there is a lot more clarity and the investors who were not able to do anything till now do have a chance to make the benefit from the rates hence forth. This area was mainly dominated by bank treasuries and dealers. The benefit of the introduction of the Intrest Rate Futures would enable the institutional investor and the normal investor to hedge against the rise in the interest rates.

The IRF’s has been introduced before in the Indian market it was six years ago and there are many difference between them and the present instrument, the one that was introduced last time did not have any price relation with any security or bond in the market. This time the scene is quite different its a highly liquid tool with the security of 10-year bond.

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