As of 7 April, Indian trade hours will be shortened from 9 am to 5 pm to 10 am to 2 pm. Market repo of government securities now running between 9 am, and 2:30 pm will be limited to the latest 10 am to 2 pm schedule. The announcement came from the RBI (Reserve Bank of India) in New Delhi.
The reforms would come into force on April 7 but were only announced to last until April 17, though several traders expect the shortened trading hours will be extended to take place during the month.
Why Change the Trading Times?
The RBI declared the shortened trading hours to handle the ongoing coronavirus spread.
With social distance rules and mobility limits coming in, many people are forced to work from home as non-essential travel is prohibited.
Through reducing trading hours, RBI claims they can reduce personnel costs and ensure a stable financial system.
As safety budgets are already small, RBI wants to be mitigating risks whenever possible.
An RBI spokesman said the resulting dislocations adversely impacted financial markets’ functioning. There have been strongly impacted personnel and their resources in IT, posing financial and organizational threats.
Operation thinning impacts market competitiveness and increases stock demand uncertainty.
Will Other Markets Follow?
Given the current global pandemic, more countries are expected to improve their trade to help reduce virus transmission.
For example, on March 17, the Philippines announced shutting down stock, bond, and currency trading for the near future.
The US is considering shorter trade hours, while US markets actively resist any amendments to market times.
Imminent Changes Ahead
While we continue to address COVID-19, no doubt further updates will be released in the coming days. To keep up with the latest information and news, keep visiting us at Review Brokers.