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The study investigates the trading in onshore and offshore Rupee Futures trading on exchanges focusing on the deviations from the equilibrium. Both onshore and offshore rates fundamentally represent the same economic asset and should have similar price dynamics; however, they deviate significantly. We model the interaction of the onshore-offshore rupee market using Continuous Futures Rupee Data. The differential in the prices of onshore and offshore Rupee Futures are analyzed with respect to the volatility and interest rates factoring in the capital and trading controls. An extended GARCH(1,1) with Relative Equity and Commodity Index along with VIX in the mean and conditional variance fit the differential of the onshore-offshore Rupee Futures. The understanding of the behavior of onshore-offshore markets is essential for Policymakers to adopt a successful exchange rate policy and traders and institutions to make informed decisions.