An internal working group of the Reserve Bank of India (RBI) on comprehensive review of market timings 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.
“While 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, there is a view that it may entail higher costs to stakeholders,” the draft report said.
However, the RBI is in the process of reviewing and rationalising foreign exchange regulations to provide flexibility in the operation in the currency markets, which would allow calibrated extension of market timings.
The call market timings could be extended till 6 pm, since the real time gross settlement (RTGS) system is operational till such time.
However, the government bond market timing can be retained and the market be closed at 5 pm, “on account of lack of demand from participants,” the working group recommended.
“There have been no requests from any market participants seeking extension of market hours for G-sec trading. Most of the FPIs investing in India already have Asian base and therefore extending the timings may not lead to larger volume. The feedback from the market is that current timings are more than adequate,” the internal group said in its report.