MUMBAI: With the rupee approaching 97 rupees per US dollar, the Reserve Bank of India (RBI) announced on Saturday a comprehensive set of measures aimed at halting the currency’s sharp decline.
The central bank sharply reduced the allowable net open position for foreign‑exchange derivatives from $100 million to $5 million, curbing speculative exposures.
It prohibited authorised dealers from rebooking cancelled rupee‑linked derivative contracts and introduced a 20 % cash‑reserve requirement for large transactions to reinforce market discipline. Additionally, a special dollar window was opened for oil importers.
On Friday, the RBI had raised the minimum daily maintenance requirement for the cash‑reserve ratio (CRR) from 90 % to 99 % of the prescribed level, effective 16 October.
The increase marked the first upward revision of the daily CRR requirement since July 2013, reflecting pressure on the rupee, which has depreciated more than 7 % this year amid tightening by the US Federal Reserve.
The central bank stated that the measures were introduced in response to evolving foreign‑exchange market conditions, with the objective of ensuring orderly market functioning.
Under the revised norms, authorised dealers may not rebook any rupee‑linked foreign‑exchange derivative contract—whether deliverable or non‑deliverable—once cancelled after the issuance of these directions. Rollover of contracts at maturity remains permitted, subject to existing regulatory requirements.
The RBI also tightened documentation requirements to prevent the same underlying exposure from being hedged through multiple authorised dealers.
OMCs get special window The RBI created a special window for oil marketing companies (OMCs) to divert dollar demand away from the spot market. Three state‑run OMCs are among the largest dollar consumers.