INR (the INRUSD ETF) jumped from 42 to 94, more than doubled, within just a few days last month. Why? I have never seen anything like that for a currency ETF.
Google is your friend. https://finance.yahoo.com/news/etf-week-indian-premiums-returns-181500459.html?.tsrc=rss Quote: Creations Halted, Premiums Develop Premiums and discounts arise over the course of normal trading in exchange-traded products, but usually, profit-minded authorized participants quickly arbitrage out any price discrepancies that may arise. When exchange-traded products close to creations, however, they eliminate the ability of authorized participants to create new shares of that product. There's no pressure valve with which they can relieve the normal premiums and discounts that come up, and as such, trading premiums often develop and persist.
https://finance.yahoo.com/news/why-indian-rupee-etn-soared-172405426.html INR is an ETN (not an ETF) and is currently trading at over a 100% premium to its NAV.
https://www.nasdaq.com/market-activity/funds-and-etfs/inr 1 USD to INR = 70.8278 That is a 32% premium. There is no volume, there was zero vol. in the months before the jump.
the problem with non major, exotic currency is that you probably can't trade its futures (only spot forex). volume is going to be very low, spread very wide, and it probably move after many months / years
Probably one of those "the market can remain irrational far longer than you can remain solvent" kind of things. I remember some of the old closed end funds used to trade at a pretty consistent discount or premium to NAV for years, and this is now pretty much the same thing as they were.