(April 17): The Indian rupee led gains in Asia after a report that the central bank has asked state-owned oil refiners to route their dollar purchases through a special credit facility.
The currency gained as much as 0.5% to 92.7738 per dollar on Friday.
Refiners have been asked to tap a special credit line for their foreign exchange requirements through the State Bank of India (SBI), the country’s largest lender, Reuters reported, citing people it didn’t identify. They are also being encouraged to route dollar purchases via SBI instead of multiple banks, the report said, citing one of the people.
“The news of the RBI asking state refiners to buy dollars using special window instead of in market has led to dollar/rupee opening lower,” said Anshul Chandak, head of treasury at RBL Bank Ltd. “The optimism around the extension of US-Iran talks is also supporting.”
The move follows bold measures taken by the Reserve Bank of India last month to clamp down on bets against the rupee. The central bank asked lenders to limit their onshore open positions to US$100 million and barred them from offering non-deliverable forward contracts to clients.
See also: India’s RBI eases some curbs on banks’ forex market trades
The rupee had hit successive lows versus the dollar after the Iran war broke out, but has recovered some losses after the RBI stepped in to curb speculation in the currency market.
Indian Oil Corp, Hindustan Petroleum Corp and Bharat Petroleum Corp are typically among the biggest dollar buyers in the currency market to pay for their crude oil imports.
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