RBI seeks explanation from Refinitiv post FX market trading glitch

economictimes.indiatimes.com:

Refinitiv after a glitch on the electronic trading platform caused trading volumes in the foreign exchange market to dry up, causing volatility in the rupee, which marked new lows versus the US dollar on Friday.

Market sources told ET that the trading outage, which occurred around mid-day, resulted in orders drying up, exacerbating volatility in the rupee’s exchange rate amid a global selloff in stocks and bonds due to hawkish comments by the US Federal Reserve chairman.

The rupee closed at an all-time low of 83.34 per US dollar on Friday. Intraday, the rupee weakened to as much as 83.48/$1, also a fresh low.

The domestic currency had closed at 83.29/$1 on Thursday.

“The RBI is said to have asked for an explanation from the ETP operator about the circumstances in which the trading issue occurred. There was avoidable and excessive volatility in the rupee’s exchange rate on Friday, largely caused by the trading glitch on the platform which houses a bulk of currency market trade,” a market source said on condition of anonymity.

“Essentially, the RBI is said to have sought an explanation on whether standard operating procedures on Business Continuity Planning were followed,” the source said, adding that the central bank wished to ascertain the root causes of the glitch and whether human error was involved.

Emails sent to the RBI and Refinitiv’s parent, the LSEG, seeking comment on the matter did not receive replies by the time of publication.

The rupee was under pressure versus the US dollar on Friday as comments by US Federal Reserve Chair Jerome Powell hinted at more rate hikes in the world’s largest economy.