RBI Opens Dollar Window for State Oil Refiners, Introduces FX Reserve Requirement as Rupee Nears Record Low

The Reserve Bank of India introduced a dollar window for state-owned oil refiners and a new reserve requirement for foreign-exchange derivatives early Saturday, October 10, according to Bloomberg. The measures came as the rupee approached its record low of 96.96 to 96.97 per dollar reached in May 2026. The central bank opened the window to allow state refiners direct dollar access and imposed a reserve requirement on FX derivatives similar to tools used by China's central bank. State-run banks were seen selling dollars on behalf of the RBI on Saturday, Bloomberg reported.

The interventions mark the central bank's strongest currency defense measures since the 2013 taper tantrum, according to Bloomberg. The rupee has fallen roughly 7 percent in 2026 and remains Asia's worst-performing currency, pressured by elevated oil prices following the Middle East war and sustained foreign portfolio outflows. India's external deficit widened by an estimated 140 to 190 basis points of GDP due to oil costs, while foreign investors have withdrawn approximately 2.29 lakh crore rupees from Indian equities in 2026, exceeding 2025's full-year outflow. The RBI's foreign exchange reserves fell $51 billion in the four weeks through October 2. Whether the new measures prevent a break below the May record depends on how far the central bank is willing to deplete its reserves while oil remains elevated and the dollar strengthens globally.

Sources

Bloomberg, "India's Rupee Defense Raises Question of How Far RBI Will Go," October 11, 2026, bloomberg.com Bloomberg, "Rupee Slide Tests RBI's Multiple Defenses as Record Low Nears," October 8, 2026, bloomberg.com Bloomberg, "India Central Bank Announces Measures to Support Plunging Rupee," October 10, 2026, bloomberg.com Business Today, "Rupee nears record low at 96.84, but RBI Governor says currency may be undervalued," October 7, 2026, businesstoday.in Business Today, "Rupee near record low: Why RBI's multiple defences are losing effectiveness," October 8, 2026, businesstoday.in India Macro Indicators, "Rupee at Record Low in 2026: What Indian Investors Should Know," accessed October 11, 2026, indiamacroindicators.co.in ExchangeRates.org.uk, "US Dollar to Indian Rupee exchange rate history," October 9, 2026, exchangerates.org.uk