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Forex markets see thin volume due to bank strike

Last Updated: Wednesday, August 22, 2012 - 18:06

Mumbai: Volume and liquidity in the forex markets were low on Wednesday following the strike by large sections of public sector and old private sector bank employees, forcing the state-run banks to stay away from the spot currency markets, traders and treasury officials said.

"Volume and liquidity in the forex market was low today as many of the public sector banks were not there in the market due to the strike," currency strategist at Geojit Comtrade Hemal Doshi said.

He, however, said the final picture will be clear by the end of the session.

Referring to some big names in the banking space, he said, "Most probably, big banks have stayed away from the spot markets. But, it is very difficult to verify as of now."

Employees of public sector banks have gone on two-day nationwide strike today opposing banking sector reforms and outsourcing of non-core activities, affecting operations.

The strike comes in the wake of the likelihood of Parliament taking up some crucial banking sector reforms bills tomorrow, including allowing more foreign holdings in state-run banks which is capped at 20 percent now.

The strike call was given by the United Forum of Bank Unions (UFBU), an umbrella organisation of nine unions of employees and officers of PSU banks which claim a membership of a million bank workers.

They are protesting against banking sector reforms and unilateral implementation of the Khandelwal committee report on human resources management in PSU banks.

Referring to the impact of strike on treasury operations, a official from IDBI Bank said that operation was normal for the bank.

"Volume was not that great today as many of the PSBs are not as active due to the strike. Also, there were not many clients in the market as they had already made alternate arrangements due to the strike," he said, adding treasury operations are normal for the bank.

A top official from state-run Vijaya Bank also said treasury operations including forex were normal for the bank.


First Published: Wednesday, August 22, 2012 - 18:06
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