RBI halves market hours for forex, government securities

MUMBAI: The RBI has restricted operating hours for all the markets that it regulates from 10am to 2pm until April 17. The shorter hours will not impact retail bank customers as all their regular banking services — including Real Time Gross Settlement (RTGS), National Electronic Fund Transfer (NEFT) and e-Kuber facilities — will continue to be available according to extant timings.
The move, which will result in halving the trading hours in forex, government securities (Gsecs) and money markets, is expected to help the RBI manage volatility and maintain orderly conditions in these markets. They are usually operational between 9am to 5pm. These markets include trading in commercial papers and certificates of deposits.
“The unprecedented situation created by the Covid-19 outbreak has necessitated lockdowns, social distancing, restrictions on the movement of people and non-essential activities, work-from-home arrangements and business continuity plans. The resultant dislocations have adversely impacted the functioning of financial markets,” the RBI said in a statement.
The central bank said that the reduced hours were needed because staff and IT resources have been severely affected, posing operational and logistic risks. “The thinning out of activity is impacting market liquidity and increasing volatility of financial prices. To minimise these risks and to ensure that market participants maintain adequate checks and supervisory controls, while optimising thin resources and ensuring safety of personnel, it has been decided to revise trading hours for various markets,” the RBI said.