How RBI plans to meet dollar needs of oil companies
What's the story
The Reserve Bank of India (RBI) has announced a special facility to meet the daily dollar requirements of three state-owned oil marketing companies. The move comes as part of the central bank's efforts to stabilize the Indian rupee, which is currently trading near its all-time low. Indian Oil, Hindustan Petroleum and Bharat Petroleum will be able to access dollars under this facility from Monday.
Timeline
The rupee has been under pressure
Under this facility, the RBI will sell US dollar to these three companies through designated banks.
The move comes as the rupee has been under pressure, trading at record-low levels in recent sessions.
On October 9, the domestic currency appreciated by 17p to close at 96.71 against the US dollar, recovering from Thursday's close of 96.88.
Additional measures
Other steps taken by RBI
The RBI has also taken other steps to ease the pressure on the rupee.
These include reducing the limit for positions in exchange-traded currency derivatives involving the rupee from $100 million to $5 million.
The central bank has also asked forex dealers to maintain a "foreign exchange risk reserve" equal to 20% of each transaction's notional amount for all derivative contracts involving the rupee.