RBI Launches Special Dollar Window for State Oil Companies to Support Rupee

New Delhi, October 10 (Daily Kiran) : The Reserve Bank of India (RBI) announced on Saturday that it will open a special dollar window for state oil companies. This initiative aims to provide support for the Indian rupee.

The special window will become operational on October 12, 2026, and will remain open until further notice. The RBI stated that, after assessing current market conditions, it decided to meet the daily dollar requirements of three state-owned oil marketing companies: Indian Oil Corporation, Hindustan Petroleum Corporation, and Bharat Petroleum Corporation.

Under this facility, the Reserve Bank will sell dollars to these public sector oil companies through designated banks.

Additionally, the RBI has tightened documentation rules to prevent the misuse of foreign exchange hedging facilities. In a separate statement, the central bank mandated that authorized dealers must obtain a written assurance from users engaging in foreign currency derivative contracts linked to the Indian rupee. This assurance must confirm that no hedging has been conducted with another authorized dealer for the same underlying exposure.

To ensure the proper functioning of the foreign exchange market, the RBI has imposed restrictions on rebooking canceled foreign exchange derivative contracts. The statement clarified that authorized dealers will not allow users to rebook any foreign exchange derivative contracts linked to the rupee—whether deliverable or non-deliverable—that were canceled with another authorized dealer after these new directives were issued.

Furthermore, the RBI has reduced the limit for foreign exchange derivative transactions without underlying exposure for all authorized dealers to the equivalent of $5 million.

For all foreign exchange derivative contracts linked to the rupee with a notional value exceeding $2 million, authorized dealers must maintain a ‘foreign exchange risk reserve’ with the Reserve Bank. This reserve must be kept in cash, equivalent to 20% of the Indian rupee value of each transaction’s notional value.