RBI formed panel to review timings of different financial markets

RBI has formed an internal committee to review timings of different financial markets. It change the timing of the functioning of the foreign exchange market from 9 am to 9 pm.
Vamsi Athreya

Updated: Jul 11,2019 12:48:58 pm

RBI formed panel to review timings of different financial markets

11 July 2019 Current Affairs:Reserve Bank of India (RBI) has formed an internal committee to review timings of different financial markets. It change the timing of the functioning of the foreign exchange market from 9 am to 9 pm. Currently, the currency market works from 9 am to 5 pm. The move is after RBI's consideration to gauge demand and potential benefits. RBI also said that if there is lack of demand from participants, the current market timings for government security markets may be retained.

Objective:
The move is after RBI's consideration to gauge demand and potential benefits. This extension of market timings is expected to provide various benefits like better pricing of post market hours information/data, improved onshore price discovery and a possible shift of offshore volumes to onshore. It is also understood that the extension might entail higher costs to stakeholders.

RBI to rationalise Forex regulations:
RBI also plans to review and rationalise foreign exchange (Forex) regulations. It aims to provide flexibility regarding products, participation and positions, both for residents and non-residents, extension of market hours would complement these policy measures.
The panel suggested call money market timings could be extended till 6 pm instead of the 5 pm now, to facilitate liquidity management by banks.
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