https://www.bloombergquint.com/business/rbi-enables-round-the-clock-rupee-trading
RBI wants to trade the currency 24 hours like the other countries… Is it going to happen really.
How it is going to affect the traders…?
If it happens can we expect good moves or dull volatility …
Is Indian market suitable for this kind of trading…?
All forex market are active mainly during UK/US sessions and planned events and unexpected news. Thats about it.
It doesn’t mean it will move all the time. Since Rupee is an asian currency , expect it to be more volatile during asian session and indian trading hours. Beyond that i wouldn’t even bother looking to trade it as there are other currencies/commodities to look at.
24 hr trading for currencies is good as it avoids gaps and thus reduces risks.
Yes, this is only for OTC, means for banks and primary dealers and not on stock exchanges. There is a proposal to increase exchange timings but nothing yet.
Either way. Even if it they extend it. Won’t make much difference to indian traders.
9-3 is more than enuf for a day trader and don’t forget commodities til 11 p.m.
How much more people want to trade?
Increasing the trade timing helps people with a full-time job to participate in the market after their office hours. I would also support an extension in the timing.
Even I prefer night trading and currency pairs and unfortunately the only pair with sufficient liquidity is the USDINR. But just because 24/7 trading is allowed by RBI doesn’t mean liquidity is present 24/7. There’s no point of being able to trade at 11pm at night if there are no buyers/sellers. Instead the better thing to do is RBI should make spot forex trading. With the kind of liquidity and volatility present in the spot market, it would make the life of many currency traders easier.
Derivatives are fine as settlement is done in cash and that too in Rupees. RBI is strictly against what you mentioned as it fears massive outflow of dollar during weak times causing a positive feedback loop. I don’t think RBI will even think about this in a decade or so.
I agree that the consequences are huge but the currency derivatives in India will never see the kind of liquidity that the spot market sees abroad. Most of the patterns and indicators I learn about online works perfectly for forex, not to mention the low margin requirements. I really wish a day will come when I’ll be able to trade forex in the spot market, since it’s impossible for me to move out of India.
Read the article once yourself before posting it. It was just a discussion paper presented by RBI 2 years back which had many faults. Nothing so far has materialized.