B · Normal
[India's central bank launches special oil window and regulatory measures to support rupee] On October 10, in order to support the rupee exchange rate, India's central bank launched a series of measures, including setting up a special foreign exchange window to supply US dollars to state-owned oil companies. The special window will be launched on Monday to meet all daily dollar requirements of the three state-owned oil companies, the Reserve Bank of India said in a statement early Saturday. Under this mechanism, the Reserve Bank of India will sell dollars to these oil companies through designated banks. The RBI also introduced other regulatory measures, including a ban on the re-registration of any previously canceled foreign exchange derivatives contracts involving the rupee. The Reserve Bank of India said that the transaction threshold for hedging exposure to signed contracts without proving the existence of the underlying asset has been reduced to US$5 million from the previous equivalent of US$100 million. In addition, the Reserve Bank of India has also introduced a foreign exchange risk reserve, requiring banks to deposit 20% of the rupee equivalent notional amount in cash with the central bank for each transaction with a nominal amount exceeding US$2 million.
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