The union civil supplies secretary has went a record a couple of weeks back that the central government has decided to give the green signal for IPSTA-ICE to kick off dollar contracts. According to him, the decision to this effect wastaken in a recent meeting attended by officials from the ministries of finance, commerce, civil supplies and agriculture.

The decision, which is expected to give a fillip to the ICE, which has been languishing for the past one year following lack of participation from foreign players. A major roadblock that hit the exchange's take off was the absence of dollar contracts, which has heightened the risk perception of the international players as they have to guard against the volatility of their domestic currency and rupee against the greenback.

IPSTA has been expecting the sanction for starting dollar contracts since the central government has allowed dollarised trade in certain other commodities. Since the government gave sanction to the Mumbai-based caster oil exchange the sanction for IPSTA is considered only as formality.Commencing of dollar contract is expected to increase both volume and liquidity in the exchange. It is also expected to attract more foreign players and pepper of other country origininto ICE.

Meanwhile, IPSTA management is toying with the idea of guaranteeing domestic contracts in a bid to mitigate risk perception of the players.

IPSTA is at present guaranteeing trade only on the ICE through the First Commodity Clearing Corporation of India (Fccci). IPSTA is mulling two options either extending the services of Fccci or setting up a separate trade guarantee fund. ÿ