RBI WORKING GROUP ON COMPREHENSIVE REVIEW OF MARKET TIMINGS

Background: 

• The RBI has, from time to time, been receiving requests for extension of timings for certain markets such as currency futures and Over-the-Counter (OTC) foreign exchange market.
  
  
• Accordingly, in August, 2018, it announced setting up an Internal Working Group (IWG) –comprising officials of Departments of the Reserve Bank – to review the timings of various markets and the associated payment and settlement infrastructure.
  
  

Recommendations:

• Forex market: It has suggested calibrated extension of currency market hours, from 9 am to 9 pm for both over-the counter and exchange traded. Presently, the markets close at 5 pm.
  • The extension of market timings is expected to provide benefits such as better pricing of post market hours information/data, improved onshore price discovery, and possible shift of offshore volumes to onshore.
    
    
  • However, there is a view that it may entail higher costs to stakeholders.
    
    
  
  
  
• Money market: Call market timings may be extended till 6:00 pm, co-terminus with RTGS customer window, to facilitate liquidity management by banks.
  
  
• G-sec market: The current market timings for G-sec markets may be retained, on account of lack of demand from participants.