CME Group today announced it has cleared two new swap currencies: the Indian Rupee (INR) Overnight Index Swaps (OIS) and Korean Won (KRW) Interest Rate Swaps (IRS).
The average daily notional of the INR swaps market is approximately $6 billion per day, and the average daily notional of KRW swaps market is approximately $12 billion per day according to the 2016 BIS Triennial Survey Data.
Adding the Indian Rupee and the Korean Won to its portfolio, the world’s leading and most diverse derivatives marketplace now offers 21 clearable OTC IRS currencies.
Sean Tully, Senior Managing Director of Financial and OTC Products for CME Group, commented:
Clearing Korean won and Indian rupee swaps in the first week they’re available for customers is a testament to the strong demand from global clients and liquidity providers, particularly in Asia, to voluntarily clear these products.
Our focus is to provide better long-term liquidity, as well as counterparty, capital and operational efficiencies to market participants who are looking for solutions in the cleared space.
A number of reputable CME Group customers, including Credit Suisse and Citi, will benefit from these first swaps offerings for the INR and the KRW.
John Dlubuc, Director in Prime Services at Credit Suisse, said:
Credit Suisse is excited to clear the first Indian Rupee OIS and to offer Korean Won swaps at CME as we feel these new currencies provide a great deal of value to our global clients. As our clients prepare for the implementation of uncleared margin rules, voluntary clearing is paramount to manage counterparty risk, gain capital efficiencies, and streamline operational processes.
Thomas Treadwell, APAC Head of OTC Clearing at Citi, said:
Citi is thrilled to extend KRW and INR interest rate swap clearing to our global client base, and we expect voluntary clearing to significantly increase as uncleared margin rules are implemented throughout the world. These products will nicely complement Citi’s comprehensive and industry-leading Futures and OTC clearing platform.
CME Group is expanding its cleared OTC IRS offerings based on client demand. The launch of clearable KRW out to 21 years and INR out to 10 years not only proves its efforts, but also allows for global market participants to access liquidity and participate in clearing in all regions.
Recently, CME Group launched clearing for Brazilian Real (BRL) CDI swaps, which has more than 80 market participants clearing $7 billion per day in 2017.
The three swaps, BRL, KRW, and INR, are non-deliverable, which allows CME Group to offer customers more efficient access to emerging markets.