RBI steps in to support rupee as forex reserves dip $52bn in a month

The Reserve Bank of India (RBI) has taken several steps to bolster the Indian rupee amid persistent foreign capital outflows and surging fuel prices. Announced on Saturday, these measures include tightening foreign exchange derivative norms with reduced transaction limits and stricter documentation requirements, as well as imposing a 20% cash reserve requirement for large forex derivatives transactions.

The central bank also established a special window to meet the daily dollar needs of three major oil marketing companies - Bharat Petroleum Corporation, Hindustan Petroleum Corporation, and Indian Oil Corporation. These actions aim to maintain market discipline, ensure proper risk management, and promote an orderly and transparent foreign exchange market.

The rupee closed at 96.73 against the dollar on Friday, edging closer to its all-time low of 96.82 in May, and has lost around 7% of its value this year, ranking among the worst-performing Asian currencies.