Hedge Indian rupee?

[Venkat123]

Hi,
I'm a non-resident Indian. I plan to transfer a large part of my savings to India in order to earn higher interest rates.

How do i hedge against a possible decline in the value of rupee above say 52 rupees/dollar? I guess i can buy some FOREX options. Where can i buy them, and what's the current premium for a year long option? Are these options underwritten by nationalized banks?

Thank you very much.

 

[FMS]

Venkat123,

you could simply buy x-number of USDINR lots at any reliable broker of your choice that offers this pair. In that case you would profit from any upside potential of the USD against the INR. Remember options expire, and they constantly lose time value.

Take a look at this possibility:
http://updates.orpheus.asia/article/2747

 

[Venkat123]

FMS,
Thanks.

My plan is to earn 9-10% interest on my savings which are currently in dollars. Current rates in US banks are 1-1.5%. I'm ready to use some portion of the difference as a hedge against a possibility that the rupee might plunge .

i don't want to buy USDINR if it's an index. However, i would be very interested in buying some 'out of money' options on this index.

Do you know any reliable broker who would be will let me buy these options?

Google wasn't much help

Any help is appreciated.

 

[FMS]

If you are US-based you may find easier this 2 alternatives:

http://currencyetf.net/indian-rupee-etf.htm

Only ICN has options, but volume is practically zero and bid-ask spread abusive.

http://finance.yahoo.com/q/op?s=ICN

USDINR is not an index, is a forex pair that can be traded in some brokers, although spread is high.