RBI sells USD to government oil companies, tightens forex rules
The Reserve Bank of India just made some big moves to steady the rupee.
To take pressure off, it is selling US dollars directly to government oil companies so these firms can pay for crude imports without flooding the open market.
The RBI also announced stricter rules: banks now need to set aside extra cash when buying more than $2 million in US dollars, and there is more paperwork for trading rupee derivatives.
India's reserves down over $50 billion
With global oil prices rising and the US dollar getting stronger, the rupee has been struggling lately: India's foreign exchange reserves even dropped by more than $50 billion in one month.
By tweaking trading rules and handling US dollar needs behind the scenes (a throwback to what the RBI did back in 2013), the central bank hopes to keep things stable and stop speculators from making things worse.