BNY’s Bob Savage notes that the Reserve Bank of India (RBI) has told state-run Oil refiners to cut spot US Dollar (USD) purchases and instead tap a special credit line via State Bank of India. The measure, reused from the Ukraine war period, aims to ease pressure on the Rupee, which has fallen over 3% this year to record lows, by reducing dollar demand from refiners and stabilizing USD/INR amid higher Oil and foreign outflows.

Special credit line to support Rupee

"The Reserve Bank of India has instructed state-run oil refiners to reduce spot dollar purchases and instead use a special credit line accessed via State Bank of India to meet their foreign exchange needs."

"This measure, previously used during the Ukraine war, aims to ease pressure on the rupee, which has depreciated by more than 3% this year to record lows, making it Asia’s worst-performing major currency."

"The credit line is available to Indian Oil Corp, Hindustan Petroleum and Bharat Petroleum, which together refine about half of India’s 5.2 million barrels/day of capacity."

"The move seeks to lower dollar demand from refiners and stabilize the rupee amid rising oil prices and foreign outflows."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)