HYDERABAD: In an unprecedented move, the Reserve Bank of India (RBI) on Friday reduced trading hours nearly by half for eight financial products from April 7-17.The revised timings (10 am to 2 pm) will be the same for all categories. Currently, though all markets open at 9 am, each had a different closing time, the last one being 6 pm.
According to RBI, the reduced trading hours for bonds, foreign exchange and others was due to operational and logistical risks arising from the nationwide lockdown imposed to fight the Covid-19 outbreak.
The situation created by the Covid-19 spread has necessitated lockdowns, social distancing and restrictions on movement of people across the country, with most offices having made arrangements to work from home, RBI said.
“The resultant dislocations have adversely impacted the functioning of financial markets. Staff and IT resources have been severely affected, posing operational and logistic risks,” RBI said in a release.
The market categories include call/notice/term money, market repo in government securities, tri-party repo in government securities, commercial paper and certificates of deposit, repo in corporate bond, government securities (Central government securities, state development loans and treasury bills), foreign
currency/Indian rupee trades including forex derivatives and rupee interest rate derivatives.
It may be noted that last month, the markets regulator Securities and Exchange Board of India and stock exchanges decided to reduce the trading hours in commodities and commodity derivatives. The timings have now been reduced to 10 am to 5 pm, as against the practice of 10 am to 11.50 pm.
Separately, there’s also clamour for shortened equity market trading hours to make them efficient. Already, some countries including Malaysia, Indonesia and Philippines have cut short the trading hours last month.
The 8 financial products
Call/notice/term money
Market repo in government securities
Tri-party repo in government securities
Commercial paper and certificates of deposit
Repo in corporate bond
Government securities (Central government securities, state develop-ment loans and T-bills)
Foreign currency/Indian rupee trades