Open interest in the RUONIA Futures Contract tripled in the first nine months of 2018 to over RUB 66 billion, reaching an all-time high since the launch of interest derivatives on MOEX in autumn 2016.
Igor Marich, Managing Director of the Money and Derivatives Markets at Moscow Exchange, commented:
We see rising interest in exchange-traded interest derivatives fueled by a stronger focus on interest rate risk from banks and their corporate customers, as well as higher uncertainty regarding future interest rates.
The MOEX RUONIA Futures helps better forecast changes in the Bank of Russia key rate, gauge market sentiment and hedge against interest rate risk. Furthermore, trading derivatives on the exchange allows execution across the market without exposure to counterparty risk plus benefiting from risk management provided by NCC acting as the central counterparty.
The MOEX RUONIA Futures contract is a derivative financial instrument of the Russian interbank lending market. The RUONIA rate is the market’s benchmark determined by the Bank of Russia based upon overnight trades between banks with minimal credit risk.
The contract allows converting short-term overnight obligations/assets to long-term ones and vice versa. It is settled thorough cash payments. Currently, over 20 participants, mostly banks, trade interest derivatives on MOEX.