RBI cuts trading hours for money, other financial markets; cites these risks

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Published: April 3, 2020 4:45:53 PM

RBI cuts down trading hours for various markets to minimise risks due to coronavirus.

financial market, rbi cuts trading hour, money market, coronavirus, covid 19, RBI, reserve bank of indiaThe money market where financial instruments with high liquidity and short-term maturities are traded will be open only from 10 am to 2 pm, instead of 9 am to 5 pm from April 7 to April 17.

Lockdowns, social distancing, restrictions on the movement of people and non-essential activities have not only pulled brakes on economic activities but the trading hours in the financial markets have also been decreased. RBI has cut the trading hours of various markets up to 4 hours daily. The money market where financial instruments with high liquidity and short-term maturities are traded will be open only from 10 am to 2 pm, instead of 9 am to 5 pm from April 7 to April 17. “Staff and IT resources have been severely affected, posing operational and logistic risks and the thinning out of activity is impacting market liquidity and increasing volatility of financial prices,” RBI said in its statement.  

In order to minimise these risks and to ensure that market participants maintain adequate checks and supervisory controls while optimising thin resources and ensuring the safety of personnel, it has been decided to revise trading hours for various markets, the Reserve Bank added.

Also Read | Lockdown effect: Opportunity to accumulate good quality stocks for long-term investment perspective

The trading hours have been revised down for seven other financial markets too, that include, market repo in government securities, tri-party repo in government securities, commercial paper and certificates of deposit. Markets related to the repo in corporate bonds, government securities, foreign currency/INR trades, and rupee interest rate derivatives that are traded on recognised stock exchanges, will also operate for reduced hours.  

The Reserve Bank of India has cited the unprecedented situation created by the COVID-19 outbreak behind this decision. Meanwhile, the regular banking services for customers, including RTGS, NEFT, e-kuber and other retail payment systems will continue to be available as per present timings. 

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