CNN Central News & Network-ITDC India Epress/ITDC News Bhopal: The Reserve Bank of India (RBI) on October 10, 2026, announced several significant measures to arrest the continuing fall in the Indian rupee and bring stability to the foreign exchange market. The central bank has decided to launch a special facility to meet the dollar requirements of state-run oil companies and to tighten rules for foreign exchange derivatives trading. The measures are aimed at reducing pressure from dollar demand and controlling excessive volatility in the rupee.
Three state-run oil companies will get the special facility. From October 12, the RBI will meet the daily dollar requirements of Indian Oil Corporation, Hindustan Petroleum Corporation and Bharat Petroleum Corporation under a special arrangement. For this, the central bank will provide dollars directly to these companies through designated banks. The facility will continue until further orders. This will remove a large part of the oil companies’ dollar purchases from the open foreign exchange market and may help reduce immediate pressure on the rupee.
The RBI has also tightened rules for foreign exchange derivatives transactions. The limit for undertaking such transactions without providing proof of underlying exposure or genuine business requirement has been reduced from $100 million to $5 million. In addition, rebooking of cancelled rupee-linked foreign exchange derivative contracts has been restricted. However, contracts may continue to be renewed at maturity subject to prescribed conditions.
The central bank has also provided for maintaining a 20 percent foreign exchange risk reserve on certain eligible foreign exchange derivative transactions. This rule will apply to specified rupee-related contracts of more than $2 million that are used to purchase foreign currency for current account-related payments. The move may increase the cost of large transactions and help curb the tendency to take excessive risk.
Several factors are behind the pressure on the rupee. High crude oil prices in the global market, a strong US dollar, foreign capital flows and international bond yields are weighing on the currency. On October 9, the rupee had closed at 96.73 against the dollar. According to experts, the RBI’s new steps may reduce dollar demand and rupee volatility in the near term, but global conditions will continue to influence the currency’s long-term position.
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