3 hrs ago
RBI Opens Dollar Window for Oil Firms Amid Rupee Pressure
The Reserve Bank of India is creating a special way for three state-run oil companies to get US dollars.
Indian Oil, Hindustan Petroleum and Bharat Petroleum can use it starting October 12.
The dollars will help them pay for their daily needs, including overseas expenses.
The RBI hopes this will mean the companies buy fewer dollars in the regular market.
The central bank also tightened some rules for trades linked to the rupee.
The rupee was close to its weakest level ever.
The RBI has not said how many dollars it will provide or given all the operating details.
An analyst said the facility may calm trading, but the dollars would come from India’s foreign-exchange reserves.
The RBI will supply US dollars through designated banks to Indian Oil, Hindustan Petroleum and Bharat Petroleum from October 12.
The facility is intended to cover the companies’ daily foreign-currency needs and reduce their demand in the spot market.
The RBI also barred rebooking of foreign-exchange derivatives and cut the exchange-traded rupee derivatives position limit from $100 million to $5 million.
Forex dealers must maintain a reserve equal to 20% of the notional amount of each rupee derivative contract.
The rupee closed at 96.73 per dollar on Friday, near its record low of 96.96; the RBI did not disclose the facility’s supply volume or detailed operating terms.
- Who
- The Reserve Bank of India and the three state-run oil companies Indian Oil, Hindustan Petroleum and Bharat Petroleum.
- What
- A special dollar-supply facility for the oil companies, alongside tighter rules for rupee-linked derivatives.
- Where
- India, with dollars supplied through designated banks.
- When
- Announced on October 10, 2026; the facility begins October 12 and continues until further notice.
- Why
- To meet the oil companies’ daily dollar requirements and ease pressure on the foreign-exchange spot market amid rupee weakness.
Potential market benefit
Potential cost and uncertainty
Effect on currency trading
Potential market benefit
ANZ strategist Dhiraj Nim said meeting the oil companies’ dollar needs could remove a major source of market demand and help reduce volatility.
Potential cost and uncertainty
Nim said supplying dollars through the facility would be reflected in a depletion of foreign-exchange reserves.
Scope and operation
Potential market benefit
The RBI said the facility would meet the three companies’ daily dollar requirements and remain available until further notice.
Potential cost and uncertainty
The RBI did not disclose the dollar volume, transaction limits or detailed operating terms, or say whether similar access would be offered to other companies.
Key facts
- Companies eligible
- Indian Oil, Hindustan Petroleum and Bharat Petroleum
- Facility starts
- October 12, 2026
- Facility duration
- Until further notice
- Rupee close
- 96.73 per US dollar on Friday
- Record low cited
- 96.96 per US dollar, reached in May
- Exchange-traded derivatives position limit
- Reduced from $100 million to $5 million
- Derivative risk reserve
- Forex dealers must hold 20% of each contract’s notional amount
- Undisclosed facility details
- The RBI did not state supply volumes, individual transaction limits or detailed operational terms.
Sources
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