The Indian rupee firmed to around 95.82 per US dollar, rebounding from levels near its historic lows after the Reserve Bank of India (RBI) unveiled additional steps to ease depreciation pressures. Effective October 12, the central bank opened a special window to fully meet the daily dollar needs of three state-owned oil companies, thereby removing a major source of demand from the spot foreign exchange market.
In parallel, the RBI tightened regulations on foreign-exchange derivatives to rein in speculative activity by corporates and introduced a cash reserve requirement on current account transactions above USD 2 million, increasing the cost of hedging against further rupee weakness. The currency had slid to 96.73 per dollar on Friday of the previous week, coming close to its record low of 96.96 reached in May.
