NEW DELHI: The Reserve Bank of India on Saturday announced a package of measures to support the rupee, including a special window to supply dollars to state-run oil marketing companies.
The facility covers Indian Oil Corporation, Bharat Petroleum and Hindustan Petroleum, and will begin on October 12 and run until further notice. The RBI will sell dollars to the companies through designated banks, after assessing current market conditions, the central bank said.
The three companies are large buyers of dollars to pay for crude imports. Sourcing their daily needs directly from the RBI should take a big, recurring demand out of the spot market and ease pressure on the rupee. The rupee has recently traded near 96.7 to 97 against the US dollar.
The RBI also tightened forex derivative rules, including restrictions on rebooking cancelled rupee-linked contracts and a 20 per cent Foreign Exchange Risk Reserve for qualifying transactions above $2 million.
The move cannot directly lower global crude prices or guarantee cheaper petrol and diesel. The rupee’s path will still depend on crude prices, capital flows and global currency movements.