What is the final settlement day in case of currency futures ?
Final settlement day is the last working day (subject to holiday calendars) of the month. The last working day is taken to be the same as that for Inter-bank Settlements in Mumbai. The rules for Inter-bank Settlements, including those for known holidays and subsequently declared holiday are those laid down by FEDAI (Foreign Exchange Dealers Association of India). In keeping with the modalities of the OTC markets, the value date / final settlement date for the each contract is the last working day of each month and the reference rate fixed by RBI two days prior to the final settlement date is used for final settlement. The last trading day of the contract is therefore 2 days prior to the final settlement date. On the last trading day, since the settlement price gets fixed around 12:00 noon, the near month contract ceases trading at that time (exceptions: sun outage days, etc.) and the new far month contract is introduced.
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