Rupee Rebounds on Fresh RBI Measures

The Indian rupee strengthened to around 95.82 per dollar, rebounding from near all-time lows as the Reserve Bank of India (RBI) introduced additional measures to curb depreciation pressures. Effective October 12, the central bank opened a special window to meet the entire daily dollar requirements of three state-owned oil companies, reducing a significant source of demand in the spot foreign exchange market. The RBI also tightened rules on foreign-exchange derivatives to curb speculative corporate activity and introduced a cash reserve requirement for current account transactions exceeding USD 2 million, raising the cost of hedging against further rupee weakness. The currency had fallen last week to 96.73 per dollar on Friday, approaching its all-time low of 96.96 hit in May.