Currency futures are futures markets where the underlying commodity is a currency exchange rate, such as an Indian Rupee to US Dollar exchange rate. Currency futures are essentially the same as all other futures markets (index and commodity futures markets), and are traded in exactly the same way.

Up to now (before 29th August 08) currency forward, currency swap and currency options were allowed in India but they were not traded on recognized stock exchanges. In India they were available on (Over the Counter) OTC market with certain restrictions, volume at OTC market is approx 34 billion $ per day.

There were certain limitations and disadvantages in OTC trading in currency market and hence (Reserve bank of India) RBI came out with circular as on April 2007 for introduction of exchange traded currency future and options.