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The Markets March 13, 2008
S&P Slates Two Real-Time Currency Indexes
Standard&Poor’s has announced the launch of two real-time currency indices that provide investors with exposure to emerging economic superpowers that currently lack a liquid currency futures market.
Reported by Nevin E. Adams
The S&P Chinese Renminbi Index and the S&P Indian Rupee Index are the first in what will be a series of real-time currency indices launched by Standard & Poor’s in 2008.
“China and India are both important markets in global trade, but currently lack a liquid and accessible currency futures market,” says David Blitzer, Managing Director and Chairman of the Index Committee at Standard & Poor’s. “The launch of these two new indices will provide investors with access to the currencies of two emerging economic superpowers, China and India, while also serving as a reliable and relative benchmark for currency performance. In the S&P Chinese Renminbi Index, this represents the first instance where U.S. investors will have access to a local Chinese asset.’
The S&P Chinese Renminbi Index and the S&P Indian Rupee Index are designed to replicate the performance of the Chinese Renminbi and the Indian Rupee versus the U.S. Dollar respectively. The indices represent the performance of a rolling investment in three-month, non-deliverable, forward currency contracts.
The S&P Chinese Renminbi Index and the S&P Indian Rupee Index are rebalanced every three months on the valuation date of the previous three-month contract. The Indices have an excess return version which reflect changes in forwards prices, as well as a total return version which adds a risk-free rate to the excess return index.
For more information on the indices, please visit www.standardandpoors.com/indices.