NCDEX launches RAINMUMBAI to hedge Mumbai monsoon rainfall risk
NCDEX just rolled out RAINMUMBAI, a new financial product that helps market participants hedge against rainfall risk in Mumbai during monsoon season (June to September).
It uses official weather data and a model built with IIT Bombay to track if rainfall is above or below the city's usual average.
Everything is settled in cash.
RAINMUMBAI payouts based on rain statistics
RAINMUMBAI is designed to help market participants hedge financial exposure from rainfall variability.
Instead of waiting for insurance after damage, this tool pays out based only on the rain stats, so it's quick and straightforward.
To keep things moving, NCDEX brought in a market maker for active trading.
As NCDEX MD & CEO Arun Raste put it, India has lived with monsoon uncertainty for centuries. RAINMUMBAI provides every stakeholder with a regulated, scientific tool to manage this uncertainty.