Capital market watchdog, Securities & Exchange Board of India (SEBI) is thinking over the possibility of allowing Non-Resident Indians (NRIs) and Foreign Institutional Investors (FIIs) to trade in foreign currency futures.

However, SEBI would wait for the market to develop before allowing NRIs and FIIs into the segment.

A currency future is a derivative contract to exchange one currency for another at a specified date in future. The price at which the transaction is to be settled is the exchange rate prevailing on the last trade date.

Currency futures' trading was launched in India in August after SEBI granted approval to select stock and commodity exchanges to do so.

Currently, the National Stock Exchange (NSE), Bombay Stock Exchange (BSE) and Multi Commodity Exchange (MCX) are the three entities that offer a platform to trade in currency derivatives.