The Reserve Bank of India (RBI) has announced measures to support the rupee, including a special dollar window for state-run oil marketing companies and tighter rules on forex derivatives. The circulars were issued on Saturday, 10 October 2026, and the rupee rallied in early trade on Monday, 12 October.
The rupee had closed at around ₹96.7 per dollar on Friday, 9 October, near its record low. India’s forex reserves fell $12.95 billion to $734.6 billion in the week ended 2 October, the fourth straight weekly decline and about $51 billion below the September record of $785.70 billion, according to Business Today.
What Are the RBI’s New Rupee Measures?
Business Today and PTI report the following steps:
First, from 12 October the RBI will meet the daily dollar requirements of Indian Oil Corporation, Bharat Petroleum and Hindustan Petroleum through a special facility, taking that demand out of the spot market. Second, authorised dealers cannot let users rebook rupee-linked forex derivative contracts that were cancelled after the directions were issued, though rollovers at maturity remain allowed. Third, the threshold for certain derivative deals without underlying exposure falls from $100 million to $5 million.
Fourth, a Foreign Exchange Risk Reserve requires a cash reserve with the RBI equal to 20% of the rupee value of eligible contracts above $2 million notional, where the hedge covers current account exposures and involves buying foreign currency. Fifth, dealers must obtain an undertaking that the same exposure has not been hedged with another authorised dealer.
Why Did the RBI Act Now?
The measures aim to curb speculative activity, reduce spot-market dollar demand and limit volatility, according to the reports. PTI cites elevated crude prices and a strong dollar as pressures; Brent was quoted at $103.11 per barrel on 12 October, with the dollar index at 101.94.
Market and Trade Reaction
The rupee strengthened by roughly a rupee in early trade on 12 October; reports put the gain between 91 and 98 paise, taking it to around ₹95.8. PTI reported foreign institutional investors sold equities worth ₹3,568.90 crore on Friday. The Sensex and Nifty were broadly flat to modestly higher in early trade. Business Today warns the dollar window could draw down reserves, and says effectiveness will depend on crude prices, portfolio flows and global dollar moves. No named economist commented in the sources reviewed.
What Happens Next?
Watch the weekly forex reserve data, oil prices, foreign portfolio flows and whether the rupee holds its early gains. The sources do not specify an end date for the measures.
Frequently Asked Questions
What is the RBI’s special dollar window?
It is a facility, effective 12 October, through which the RBI supplies dollars to Indian Oil, BPCL and HPCL so their purchases do not hit the spot market.
What is the Foreign Exchange Risk Reserve?
Eligible rupee-linked derivative contracts above $2 million require a cash reserve with the RBI equal to 20% of their rupee value.
How did the rupee react?
It gained about a rupee against the dollar in early trade on 12 October to roughly ₹95.8, according to PTI and India TV reports.
Sources: Business Today (10 October 2026), PTI via HDFC Sky (12 October 2026), India TV News (12 October 2026).
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