The Reserve Bank of India (RBI) on Saturday said it will start a spacing facility from Monday to meet the daily dollar requirements of the three state-owned oil companies (OMCs). The central bank has also announced a number of regulatory measures to strengthen discipline in the foreign exchange market, ensure proper risk management and maintain an orderly and transparent market environment. The move comes at a time when the rupee continues to depreciate amid continued geopolitical and global economic uncertainties. The local currency closed at 96.71 against the US dollar on Friday.

The three oil marketing companies (OMCs) banned by the RBI include Indian Oil Corporation Limited (IOCL), Hindustan Petroleum Corporation Limited (HPCL) and Bharat Petroleum Corporation Limited (BPCL). For this special window has been announced. Under this facility, the central bank will sell US dollars to these public oil marketing companies through designated banks. This arrangement will come into force from October 12, 2026 (Monday) and will remain in force till further orders. The RBI has also taken some regulatory measures to curb speculation in the foreign exchange market and stabilize the rupee. If a customer cancels a foreign currency derivative deal once, banks will not allow it to be booked again.

The pressure on the rupee may ease

Crude oil accounts for about 25 percent of India’s total imports. Meeting the daily dollar requirements of oil companies through a special window may take away some of the demand from the spot market, although the dollars for this will be supplied from the RBI’s forex reserves. The private bank’s treasury head said the move could reduce pressure on the spot market, while restrictions on derivatives could reduce forward premiums. The private bank’s treasury head said the special window for oil should ease some pressure on the spot market, as crude oil accounts for about 25 percent of India’s total imports.

Restrictions on derivative transactions may also reduce pressure on forward premiums in the near future. The lower limit for transactions without any actual transaction (underlying exposure) will primarily affect positions that are not linked to any actual transaction. This should not have the same effect on importers who hedge their actual payment requirements.

What do the experts say?

The Treasury head said these measures could provide relief to both spot rupee and forward premiums in the near future. But fundamental pressures will remain. India’s balance of payments is still weak, the dollar is strong and global bond yields are high – all a bad combination for an emerging market that is a net importer of oil. He also said that there would be a risk of rupee depreciation in the medium term.

HDFC Securities Research Analyst Dilip Parmar said the move is aimed at curbing volatility and speculative positions. Parmar said in the Money Control report that the RBI wants to curb excessive volatility and speculative conditions, while the special window for the dollar will take some of the demand from oil companies out of the spot market. These measures should support the rupee, but banks may pass on the additional cost of hedging to customers.