RBI opens special dollar window for oil firms as rupee comes under pressure | Finance News
The Reserve Bank of India (RBI) on Saturday announced a host of measures to support the rupee, which is trading close to its all-time low, including a special window to meet the dollar demand of three state-run oil marketing companies (OMCs).
The three OMCs are Indian Oil Corporation Ltd (IOC), Hindustan Petroleum Corporation Ltd (HPCL) and Bharat Petroleum Corporation Ltd (BPCL).
“On the basis of assessment of current market conditions, Reserve Bank of India has decided to open a special window to meet the entire daily dollar requirements of three public sector oil marketing companies,” the RBI said in a press release on Saturday.
Under the facility, the RBI will sell dollars to the public sector OMCs through designated banks.
The facility will come into effect from October 12, 2026, and will remain in place until further notice, the central bank said.
The central bank has also announced regulatory measures for the foreign exchange market and imposed restrictions on the rebooking of cancelled foreign exchange derivative contracts.
“Authorised Dealers shall not permit users to rebook any foreign exchange derivative contract involving INR, whether deliverable or non-deliverable, which has been cancelled with any Authorised Dealer after the issuance of the Directions,” the RBI said.
Rollover of foreign exchange derivative contracts on maturity will continue to be permitted.
The RBI has also reduced the threshold for undertaking foreign exchange derivative transactions without establishing an underlying exposure to $5 million from $100 million.
“The corresponding threshold for taking positions in exchange-traded currency derivatives involving INR, without establishing the existence of underlying exposure, has also been reduced from $100 million to $5 million equivalent, across all Recognised Stock Exchanges taken together,” it said.
The central bank also introduced a Foreign Exchange Risk Reserve (FERR), requiring forex dealers to maintain a reserve equal to 20 per cent of the notional amount of each eligible derivative transaction involving the rupee.
“This FERR shall be applicable for foreign exchange derivative contracts involving INR undertaken to hedge current account exposures where the user purchases foreign currency against the INR,” the RBI said.
The central bank said the measures were intended to strengthen market discipline and ensure appropriate risk management in the foreign exchange market, while maintaining an orderly and transparent market environment.
The Indian currency has come under pressure since the West Asia conflict began in late February, depreciating 6 per cent.
Over the past year, the rupee has depreciated by more than 8 per cent.
The central bank has been heavily intervening in the foreign exchange market to curb volatility.
India’s foreign exchange reserves declined by about $51.1 billion in the four weeks ended October 2 after touching a record $785.7 billion in the week ended September 4.
