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To take the pressure off the rupee due to unrelenting demand for the dollar, the Reserve Bank of India has opened a special window to meet the entire daily dollar requirements of three public sector oil marketing companies.
In the backdrop of the domestic currency’s plunge, the central bank has activated the forex swap window, whereby it will undertake sell/buy of dollar-rupee forex swaps for a fixed period with Indian Oil Corporation, Hindustan Petroleum and Bharat Petroleum through a designated bank.
A forex swap entails simultaneous purchase and sale of identical amounts of one currency for another with two different value dates (normally spot to forward).
Forex dealers say with the oil companies’ dollar demand getting quarantined, the rupee should stabilise. In a late evening statement, the RBI said the swap facility, operational immediately, will remain in place until further notice.
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