Clocking the Forex Revolution: India Eyes Round-the-Clock Markets with Smarter Hedges

Updated: November 04, 2025 10:49

Experts highlight that while India has taken steps toward 24x7 forex market operations, significant groundwork remains. There is a pressing need to develop a wider variety of interest rate hedging products to enable better risk management for investors and corporates in a dynamically evolving global market.

India's Reserve Bank and financial market stakeholders acknowledge the benefits of moving towards 24x7 forex market operations to better align with global trading hours and provide continuous risk management opportunities for market participants. Select Indian banks already offer forex rates beyond traditional interbank hours, but broader market reforms and infrastructure enhancements are needed before fully transitioning to continuous 24x7 operations.

Alongside market timing expansion, there is a critical demand to broaden the suite of interest rate hedging instruments. Currently, market participants use tools like interest rate swaps, futures, options, and forward contracts to manage rate risks. However, experts recommend introducing more sophisticated products such as long-tenure forwards, structured swaps, and bespoke hedging solutions to manage complex exposures more effectively.

The Reserve Bank of India has initiated working groups to review market timings and propose regulatory frameworks to support these changes. In parallel, enhancements in digital trading platforms and settlement systems are underway to ensure smooth operations round-the-clock.

A well-rounded approach with continuous market hours and a diverse range of financial instruments is essential to meet the evolving needs of Indian corporates, banks, and investors, bolstering domestic financial market resilience and integration with global markets.

Key Highlights:

India progressing towards 24x7 forex markets; select banks offer extended hour forex rates
Need for wider variety of interest rate hedging products to manage rate risks
Existing derivatives include swaps, futures, options, forward contracts
Recommended expansion into long-tenure forwards, structured swaps, bespoke products
RBI sets up working groups to review market timings and regulatory framework
Infrastructure modernization planned for continuous market operations
Aim to enhance risk management tools for corporates and investors

Sources: Reserve Bank of India notifications

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