Reserve Bank initiates direct dollar sales to oil firms

Reserve Bank of India policymakers established a direct dollar-supply facility for three state-run oil marketing companies to stabilize volatile currency markets. Starting October 12, 2026, this exclusive window will fulfill the entire daily foreign exchange requirements of Indian Oil Corporation, Bharat Petroleum Corporation, and Hindustan Petroleum Corporation. Central bank authorities will route these strategic dollar sales strictly through designated commercial lenders.

Regulators activated this intervention as domestic currency values approached historic lows near 96 against the United States dollar. Petroleum importers consistently generate high demand for foreign currency to secure international crude supplies. Directing these large daily procurement volumes away from standard spot markets prevents major energy corporations from inadvertently driving further currency depreciation. Recent escalations in global crude prices have only multiplied the financial volume required for standard energy imports.

Financial authorities simultaneously deployed tight restrictions across foreign exchange derivative platforms. Authorised banking dealers are now strictly prohibited from letting traders rebook canceled derivative contracts that involve domestic currency. Furthermore, regulatory officials drastically reduced the baseline limit for executing forex transactions without proving actual underlying asset exposure. That specific trading threshold dropped sharply from 100 million dollars down to just 5 million dollars.

Bank regulators also formalised a new Foreign Exchange Risk Reserve protocol for the banking sector. Financial institutions must now hold a 20 percent cash reserve with the central monetary authority for eligible derivative contracts that exceed a 2 million dollar notional value. This defensive economic posture aligns closely with recent Monetary Policy Committee warnings regarding heightened global financial volatility. These coordinated market stabilisation measures will remain active until further official notice.