Key facts
- RBI tightened rules on rupee-linked foreign exchange derivatives.
- New dollar window opened for state oil marketing companies.
- Limit for forex derivative transactions without underlying exposure cut to $5 million.
- New Foreign Exchange Risk Reserve requires 20% cash holding for certain derivative contracts.
- Rupee near record low, down nearly 7% this year.
- RBI raised repo rate by 25 basis points in October.
India's central bank has introduced new measures to curb speculative dollar demand and support the rupee, which is trading near its record low. The Reserve Bank of India (RBI) tightened rules on rupee-linked foreign exchange derivatives and established a dedicated dollar window for state-owned oil marketing companies. These actions aim to stabilize the currency, which has depreciated nearly 7% this year. The RBI also raised its repo rate by 25 basis points in its October policy meeting.