Rupee Rises 25 Paise To 92.95 As RBI Provides Dollar Window To Oil Firms

The Indian rupee strengthened by 25 paise to open at 92.95 against the U.S. dollar on April 17, compared with its previous close of 93.20, following measures by the Reserve Bank of India (RBI) aimed at easing demand for dollars in the domestic market, according to Reuters.

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RBI Introduces Special Dollar Mechanism

The RBI has asked state-run oil refining companies to use a special foreign exchange credit window instead of purchasing dollars from the open market, Reuters reported. It will ease the strain on the rupee since oil companies are some of the biggest consumers of foreign currency in India.

Refineries will be able to acquire dollars from banks by following certain procedures. According to Reuters, State Bank of India is handling such deals using special lines of credit.

Oil marketing companies typically buy dollars daily to pay for crude imports. These regular purchases have been identified as a key source of demand for the U.S. currency in recent sessions, according to Reuters.

Impact On Currency Movement

The reduction in direct dollar demand from oil firms contributed to the rupee’s recovery at the opening of trade on April 17. The currency had settled at 93.20 in the previous session before strengthening to 92.95.

This measure follows earlier steps by the central bank to address volatility in currency markets, including actions related to offshore forward trading, according to Reuters.

Global Cues And Oil Prices

Global crude oil prices remained below $100 per barrel amid renewed diplomatic engagement between the U.S. and Iran, according to market data cited by Reuters. Despite this, currency markets have remained sensitive to geopolitical developments.

Recent Trend In Rupee

The rupee has declined about 3% on a year-to-date basis against the U.S. dollar, making it among the weaker-performing currencies in the Asia-Pacific region during this period, according to Reuters data.

The latest RBI measure aims to manage short-term demand-supply dynamics in the foreign exchange market while ensuring that oil import payments continue without disruption.