The Reserve Bank of India has allowed banks to offer foreign-currency transactions all time even later than the local hours, this step has been taken to boost the growth. Now all the Interbank deals, deals with customers in and outside India, can be operated by banks or their overseas branches and units at all times, the RBI said in a statement. It stopped short of saying whether the timing of the onshore over-the-counter market has been extended from the current 9 a.m. to 5 p.m.
The RBI has taken this move to reverse the trend of the trading of Rupee abroad than in India. London has becom the top center for Rupee trading btyy overtaking Mumbai, adding to a sense of urgency among local authorities to deepen the onshore market.
As per a survey from the Bank for International Settlements published in September, average daily volumes for rupee in the UK soared to $46.8 billion in April, a more than fivefold jump from $8.8 billion in 2016. That exceeded the $34.5 billion recorded in India.
Analysts say more trading abroad could impact the volatility in the domestic market and reduce the effectiveness of policy actions.
the London Stock Exchange Group Plc has started asking market participants if they want the bourse to function fewer hours, after which India has decided to extend the trading hours in the domestic market.