India has announced that the benchmark bdo foreX (BB) will be suspended from trading from July 10 for three days.
BB is the only forex currency to have been suspended in the last week as traders rush to buy the benchmark before the Bank of England will announce its decision on whether to reinstate BB from trading.
The Reserve Bank of India has already said that it will extend the ban for a maximum of four days, until July 10.
The Reserve Bank has also said that its monetary policy committee will announce the next steps in its policy response to the BB suspension, expected in mid-July.
The BB, the most widely used forex benchmark, has slumped in value over the last two weeks.
It has been down over 60 per cent against the US dollar and is down nearly 10 per cent since the start of the year.
The ban is expected to be lifted within two weeks, but traders are likely to rush to get their hands on the BB to protect their investment portfolios ahead of the Bank’s announcement on the reinstatement of BB from the market.
The RBI will announce a series of measures, including the rate of interest and the benchmark interest rate, on Wednesday.
The Bank will also announce a new set of rules for traders who want to withdraw their deposits from the BB market.
The forex markets are expected to resume trading in July.