Overview
- India’s central bank has steered state-run oil refiners to tap a dedicated foreign-exchange window routed via State Bank of India instead of buying dollars in the spot market.
- Traders and bankers say refiners’ spot purchases have slowed in recent days, and the rupee has edged off record lows with a gain of about 2% from its trough.
- The Reserve Bank of India is also selling dollars from reserves and has tightened rules on certain currency trades to contain volatility.
- Refiners can draw dollars via the SBI credit line or use a central-bank reference rate, a setup that could raise their FX costs and change how they time payments, according to market reports.
- State firms such as Indian Oil, Hindustan Petroleum, and Bharat Petroleum are among India’s biggest dollar buyers because crude is priced in U.S. dollars, so shifting their flows off the spot market can quickly reduce pressure on the rupee.