Indian Rupee Rises: Rupee jumps 0.5% to one-week high, leads Asia gains on RBI oil dollar window move – Firstpost

The Indian rupee rose sharply on Friday to touch a one-week high, outperforming regional peers and leading gains across Asian currencies after reports that the Reserve Bank of India (RBI) has moved to ease pressure from heavy dollar demand by state-run oil refiners through a dedicated forex mechanism.

The rupee gained up to 0.5 per cent in early trade to around 92.73 per US dollar, its strongest level since April 10, after reports that the Reserve Bank of India has nudged state-run oil firms to meet their dollar requirements via a special credit facility instead of tapping the spot forex market directly

State-run refiners are being nudged to meet import-related dollar needs through a dedicated credit line via State Bank of India, rather than sourcing dollars across multiple banks in the open market, Reuters reported on Thursday.

The move comes as Indian Oil Corporation, Hindustan Petroleum Corporation and Bharat Petroleum Corporation remain among the largest structural buyers of dollars in the domestic foreign exchange market, given their regular crude oil import requirements. Any change in their purchasing route tends to have an immediate impact on short-term liquidity conditions in the currency market.

Friday’s rally also reinforced the rupee’s position as one of the better-performing Asian currencies in early trade, even as regional moves remained largely range-bound amid mixed global cues.

With the latest gains, the rupee has recovered about 2.5 per cent from record lows hit in late March, supported by a series of RBI measures aimed at curbing volatility and speculative positioning in the currency market. These include tighter limits on banks’ net open foreign exchange positions, restrictions on non-deliverable forward contracts, and targeted mechanisms to manage oil-related dollar demand.

Global factors also provided some support to sentiment. Markets tracked developments around West Asia, including cautious optimism over diplomatic engagement involving the United States and Iran, which helped ease immediate risk concerns in energy markets.

With inputs from agencies.