Did RBI Extend Trading Hours for Call Money and Repo Markets Starting July 1?
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Synopsis
RBI's decision to extend trading hours for key money markets is set to boost liquidity and enhance price discovery. Starting July 1, the call money market will operate until 7:00 PM, while market repo and TREP will close at 4:00 PM from August 1. This move aims to provide greater flexibility for market participants.
Key Takeaways
- The call money market will operate from 9:00 AM to 7:00 PM starting July 1.
- Market repo and TREP hours will be extended to 4:00 PM from August 1.
- This decision aims to increase liquidity and enhance price discovery.
- Current trading hours for other markets remain unchanged.
- Recommendations stemmed from a working group led by Radha Shyam Ratho.
New Delhi, June 25 (NationPress) The Reserve Bank of India (RBI) has officially declared that it will prolong the trading hours for the call money market, market repo, and Tri-Party Repo (TREP), beginning July 1.
This initiative follows the recommendations from a working group led by Radha Shyam Ratho.
As per an official announcement, the trading hours for the call money market will see an extension of two hours.
Currently, the market closes at 5:00 PM, but starting July 1, it will remain operational until 7:00 PM. The call money market will now function from 9:00 AM to 7:00 PM.
“The market timings for call money shall be extended to 7:00 PM with effect from July 01. Accordingly, the revised market hours will be from 9:00 AM to 7:00 PM,” the central bank stated.
In addition, trading hours for the market repo and TREP segments will be extended to 4:00 PM, compared to the current closing time of 2:30 PM.
“The trading hours of market repo and Tri-Party Repo (TREP) shall be extended to 4:00 PM effective from August 01. The revised trading hours will be from 9:00 AM to 4:00 PM,” the RBI mentioned.
The RBI stated that this change will provide greater flexibility to market participants and enhance liquidity management in the overnight money market.
The central bank believes that these extended hours will also facilitate better price discovery and enable financial institutions to manage their short-term funding requirements more efficiently.
However, there will be no immediate alterations in the trading hours of other markets such as government securities, foreign exchange, and interest rate derivatives. These markets will continue to operate according to their existing schedules.
The working group tasked with proposing these changes was instructed to evaluate the current trading and settlement timings to enhance market development, support price discovery, and optimize liquidity management.
The RBI also indicated that it is still examining other suggestions made by the working group and will make further decisions in the future.
Point of View
It is essential to recognize that the RBI's recent decision signifies a proactive approach to adapting to the evolving financial landscape. By extending trading hours, the central bank is not only fostering greater flexibility among market participants but also enhancing overall market efficiency. This move aligns with the nation's goal of improving liquidity and price discovery in the financial sector.
NationPress
25/06/2025
Frequently Asked Questions
What are the new trading hours for the call money market?
The call money market will now operate from 9:00 AM to 7:00 PM starting July 1.
When will the trading hours for market repo and TREP be extended?
Trading hours for market repo and TREP will be extended to 4:00 PM effective August 1.
Why is RBI extending the trading hours?
The extension aims to provide more flexibility to market participants and improve liquidity management.
Will there be changes in the trading hours of other markets?
No, currently there are no changes in the trading hours of government securities, foreign exchange, and interest rate derivatives.
Who led the working group that recommended these changes?
The working group was led by Radha Shyam Ratho.
