EDITOR'S NOTE: India is about to launch the India International Bullion (IIBX) exchange this Friday, July 29. Considering how India is one of the largest markets for gold and how gold has played a central role in its culture and economy, perhaps this shouldn’t be too much of a surprise. In addition to opening the exchange, India is also launching a platform NSE IFSC-SGX Connect that will create a unified (and deeper) liquidity pool for derivatives and NIFTY products. Our thought bubble: India is currently the second largest importer and consumer of gold. With IIBX, it will now play a major role in the international gold trade, potentially influencing the price of global bullion prices. India is also part of the BRICS countries. If you remember, earlier this week, China and Russia officially announced that they will be launching a new global reserve currency comprising a basket of BRICS currencies. China is the largest gold producer, and Russia is on a semi-gold standard. Far from being a “barbarous relic,” gold is once again reclaiming its role on the world’s monetary stage. This potentially spells “Dollar Doom,” and Americans with no gold exposure may be more vulnerable to the new global monetary order as the dollar’s value and adoption in the global economy begins to fade.
India International Bullion Exchange which will facilitate efficient price discovery with assurance of responsible sourcing and quality, apart from giving impetus to financialisation of gold in India.
He will also lay the foundation stone of the unified regulator International Financial Services Centres Authority's headquarters building.
GIFT City is India's maiden International Financial Services Centre (IFSC).
The prime minister, during his visit, will launch the India International Bullion Exchange (IIBX), which will facilitate efficient price discovery with the assurance of responsible sourcing and quality, apart from giving impetus to the financialisation of gold in India, according to a statement by IFSC Authority.
"This shall empower India to gain its rightful place in the global bullion market and serve the global value chain with integrity and quality. This also re-enforces the commitment of the Government of India towards enabling India to be able to influence global bullion prices as a principal consumer," the statement said.
Also, the prime minister will launch NSE IFSC-SGX Connect. Under this system, all orders on Nifty derivatives placed by members of Singapore Exchange Limited (SGX) will be routed to and matched on the NSE-IFSC order matching and trading platform.
The connect platform will deepen liquidity in derivative markets at GIFT-IFSC.
Brokers and dealers from India and across international jurisdictions are expected to participate in large numbers for trading derivatives through the connect.
Several key announcements will also be made during the visit of the prime minister, the statement said.
Chief Minister of Gujarat Bhupendra Patel, Union Minister of Home Affairs and Co-operation Amit Shah, Union Minister of Finance and Corporate Affairs Nirmala Sitharaman, Union Ministers of State for Finance Pankaj Chaudhary and Bhagwat Kishanrao Karad will be attending the events.
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Originally published on Business Standard.