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The Reserve Bank of India (RBI) on Wednesday announced that it will extend the trading hours for the call money market, market repo, and Tri-Party Repo (TREP), starting July 1. 

This decision is based on the recommendations made by a working group led by Radha Shyam Ratho.

According to an official statement, the trading hours for the call money market will be extended by two hours.

Currently, the market closes at 5:00 pm, but from July 1, it will remain open till 7:00 pm. The call money market will now operate 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 shall be from 9:00 AM to 7:00 PM,” the central bank stated.

Similarly, trading hours for the market repo and TREP segments will be extended to 4:00 pm, compared to the present closing time of 2:30 pm.

“The trading hours of market repo and Tri-Party Repo (TREP) shall be extended to 4:00 PM with effect from August 01. Accordingly, the revised trading hours shall be from 9:00 AM to 4:00 PM,” RBI mentioned.

The RBI said this move will give more flexibility to market participants and help improve liquidity management in the overnight money market.

The central bank believes these extended hours will also lead to better price discovery and allow financial institutions to manage their short-term funding needs more effectively.

However, there will be no changes for now in the trading hours of other markets such as government securities, foreign exchange, and interest rate derivatives. These will continue to operate as per their existing timings.

The working group that recommended these changes was asked to review the current trading and settlement timings to improve market development, support price discovery, and make liquidity management more efficient.

The RBI also mentioned that it is still reviewing other suggestions made by the working group and will take further decisions in the future.