RBI creates dollar window and tightens rules to stabilize rupee
The Reserve Bank of India (RBI) is stepping in to help the rupee, which has been under pressure as India's foreign exchange reserves drop.
To keep things stable, RBI is tightening rules around currency trading and creating a special dollar window for public oil companies so they can get dollars more easily.
The goal? Curb speculative activity and slow down the rupee's slide.
RBI bans rebooking of rupee derivatives
RBI has cut back on speculative trading by banning rebooking of canceled rupee derivative contracts and lowering transaction limits without real business needs from $100 million to just $5 million.
Starting October 16, banks will also have to keep more cash in reserve daily (the daily minimum CRR maintenance requirement rises to 99% from 90%, with CRR unchanged), and RBI plans additional open market operation (OMO) sales of ₹250 billion on October 13 to drain liquidity.
Nomura said these moves show RBI is serious about protecting the rupee, even though tougher choices may lie ahead if global challenges stick around.