India is set to enter financial record books on Friday when it becomes the first significant money market in the world to commence trading in the new European single currency, the euro.

The distinction is the result of coincidence as India is the only major foreign exchange (Forex) market to remain open on 1 January, the date of the euro's launch.

So far the response of the Indian Forex markets to Euro's launch is quite cool but dealers in India's commercial capital, Bombay, say activity in the euro will pick up only next week when European and other international markets reopen after the New Year holiday.

Corporate and inter-bank dealings in the euro are also expected to begin after a fortnight when international trends in the new currency firm up.

Local dealers 'tentative'

However, a provisional customer transaction rate will be fixed for the euro on New Year's Day and it is likely to be in the same range as the European currency unit.

The Indian central bank, the Reserve Bank of India, has also issued a set of guidelines to merchant bankers and Forex dealers to keep them in a state of euro readiness.

Despite the guidelines and a couple of euro workshops organised by the Indian Foreign Exchange Dealers' Association, most local dealers are quite tentative and it may be a few months before they begin active trading in the euro.