Restricted Market Trading Comments

By Dara O’Sullivan and Ilan Solot

BBH continues to see increased volatility across the restricted market space as the impact of the Corona virus accelerates.  Many restricted markets that we actively participate in were forced to take precautions and closures in some cases. Here are some comments from our trading desk.

Philippines: Following last week’s closure of all trading and settlement in response to the quarantine, the market has resumed operations with shortened hours.

India: A nationwide lockdown has today been announced across all of India. While a lockdown was in place across some states in India on March 23 including Maharashtra and the city of Mumbai, banks and financial institutions continued to operate as normal. So far, we have seen no impact to FX and securities trading, though spreads have widened and liquidity is tightening. We will continue to monitor the situation and provide updates as they occur.

Vietnam: FX market has been experiencing limited foreign currency liquidity. Local banks have advised delays in repatriations are possible.

Sri Lanka: Curfew imposed and closure of the Colombo Stock Exchange (CSE). The curfew will be lifted daily at 6am locally and imposed again at noon, resulting in limited trading capabilities. FX and government securities transactions are permitted between 8:30am and 9:30am locally with cash settlement ceasing at 10:00am local time. The market is to continue operating in this manner until further notice.

Nigeria: Liquidity remains strained even before last Friday’s devaluation, the first since 2017. Previously liquidity issues in Nigeria resulted in a first in first out (FIFO) queueing system to repatriate funds before the introduction of The Investors’ & Exporters’ FX Window (I&E FX Window) in 2017. While this FIFO queueing system has not been announced we continue to monitor the liquidity situations in these markets and will provide updates as they are received. Note that the central bank manages several exchange rates and devalued the one used by foreign investors by around 4% to 380 per dollar. The move could have been much larger, and another round may come soon.  Other petro-currencies have fallen much more as the price of oil plunged.  For instance, MXN is down nearly 25%  YTD, RUB 23%, BRL 20%, and COP 20%.  In the majors, NOK is -20% YTD and CAD -10% YTD.


Ghana and Kenya: Are experiencing foreign currency liquidity issues. We continue to monitor the liquidity situations in these markets and will provide updates as they are received.

Morocco: the Casablanca Stock Exchange (CSE) and the Bank al Maghrib shortened their FX and securities deadlines to 2 PM local time until further notice.

Kuwait: The Council of Ministers extended their previously declared holiday by a further two weeks to April 9 in response to the virus. This resulted in local FX markets closing at 12.30pm local time instead of 1.30pm local time.

Mauritius: Effective March 20th, the Stock Exchange of Mauritius (SEM) suspended trading until further notice. The market announced there will be no impact to the settlement of transactions settling on March 23 and 24.

Pakistan: The Pakistan Stock Exchange (PSE) has temporarily put in place revised trading hours and these will remain in place for 15 calendar days. Banks in Pakistan have also confirmed reduced working hours from 10:00am locally to 4:30 pm.