With the rupee crashing to a record low of 73.77, plunging 43 paise from previous closing mark of 73.34, the Reserve Bank of India moved to improve dollar supply by allowing oil companies to raise foreign currency loans for their working capital requirements. The move falls short of the market expectation that the central bank would sell dollars directly to oil companies, and will not result in an immediate inflow of dollars. But, it will help preserve the RBI’s reserves and bring in more forex when oil companies start borrowing.
The rupee’s free fall has been accentuated by crude oil breaching the $85 per barrel level. The dollar has gained almost Rs 10 this year — the highest since the Rs-15 appreciation in 2013 following the taper tantrums. Read More