Mumbai: The Reserve Bank of India (RBI) will start a special dollar window for India’s three big government oil companies from Monday, 12 October 2026. Through this RBI dollar window, the central bank will meet the “entire daily dollar requirements” of Indian Oil Corporation (IOC), Hindustan Petroleum Corporation (HPCL) and Bharat Petroleum Corporation (BPCL). The RBI announced the step on Saturday, 10 October, as the rupee stays close to its weakest level ever against the US dollar.
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What has the RBI announced?
In a short press release, the RBI said it took the decision “on the basis of assessment of current market conditions”. Under the plan, the RBI will sell US dollars to the three oil companies through one or more chosen banks. The window will stay open “until further notice”. No end date has been given.
The Financial Express noted that the RBI has not named the banks. It has also not said at what price, or in what amount, the dollars will be sold.
Why do oil companies need so many dollars?
India buys most of its crude oil from other countries. The Indian Express reported that India imports more than 88 per cent of the crude oil it needs. Oil companies need dollars to pay for these imports.
So every day, the oil companies must buy a lot of dollars. Until now, they bought them in the open currency market, where banks and traders buy and sell money. When big buyers keep asking for dollars, the dollar gets costlier and the rupee gets weaker.
Moneycontrol said crude oil makes up around 25 per cent of India’s imports. If this big demand goes to a separate RBI window, less of it hits the open market. The Financial Express said this could reduce the oil companies’ demand for dollars in that market.
How weak is the rupee right now?
The rupee closed at 96.73 to a dollar on Friday, 9 October. In simple words, you needed about Rs 96.73 to buy one US dollar. A day earlier, the rate was 96.79.
Moneycontrol reported that the rupee’s record low is 96.96, touched in May this year. It said the rupee has lost more than 7 per cent in 2026 so far. The reasons it gave were high crude prices, a strong dollar, high global bond yields and weak flows of foreign money. Business Standard said the rupee has fallen about 6 per cent since the West Asia conflict began in late February.
Oil is costly too. The Indian Express said crude has crossed 100 dollars a barrel.
India’s forex reserves are falling
The dollars for this window will come from the RBI’s own foreign exchange reserves, Moneycontrol noted. These reserves are the foreign currency and gold that the RBI holds. They fell by 12.95 billion dollars to about 734.6 billion dollars in the week ended 2 October. That is about 51 billion dollars below the record high of 785.7 billion dollars, seen in the week ended 4 September.
New rules for currency deals
On the same day, the RBI issued two circulars with new rules for the foreign exchange market. These mainly affect banks, big companies and traders who use derivatives. A derivative here is a contract to buy or sell a currency at a fixed rate on a future date. Firms use them to guard against sudden rate swings. The RBI said the aim is to “strengthen market discipline”. The main changes are:
- No rebooking: If a user cancels a currency contract linked to the rupee, banks cannot let the user book it again. Rolling over a contract when it ends is still allowed.
- Lower limit without proof: Earlier, a user could take such deals up to 100 million dollars without showing a real need, like an import bill. The limit is now just 5 million dollars, across all banks. The same cut applies on stock exchanges.
- One cover per need: Users must give their bank a written promise that the same need has not been covered with another bank.
- New cash reserve: For deals above 2 million dollars where the user buys foreign currency against the rupee to cover trade payments such as imports, banks must keep 20 per cent of the deal’s rupee value as cash with the RBI. This is called the Foreign Exchange Risk Reserve.
What experts are saying
Experts quoted by Moneycontrol said the steps can give some relief in the near term. A treasury head at a private bank said the oil window “should help reduce some of the pressure on the spot market”. But the same person warned that “the underlying pressures remain”, pointing to a weak balance of payments, a strong dollar and high global bond yields.
Dilip Parmar, research analyst at HDFC Securities, said the measures “should support the rupee, but banks may pass on the additional hedging costs to customers.”
RBI Governor Sanjay Malhotra had said at the policy press meet on 7 October that the rupee could be undervalued. “Markets can be quite irrational in the short run,” he said, as reported by Moneycontrol. On the same day, the RBI raised its repo rate to 5.50 per cent. You can read what that means for home and car loans in our story on the RBI repo rate hike and your EMI.
What does this mean for you?
The RBI release says nothing about petrol or diesel prices. The window only changes where the three companies get their dollars.
Still, the rupee matters to every family. The Indian Express noted that higher energy costs can spread to transport and factories, and finally to household budgets and prices. It also reported that in September, the three oil companies were estimated to be losing more than Rs 500 crore a day on fuel sales, because global prices rose more than local pump prices.
If rising fuel costs are making you rethink your next vehicle, our guide on the difference between petrol, diesel and electric cars can help. You can also read about the rise of electric vehicles in India.
Short FAQ
When does the RBI dollar window start?
From Monday, 12 October 2026. It will stay open until further notice.
Will petrol become cheaper because of this?
The RBI has not said so. News reports describe the step as a way to ease pressure on the rupee, not to set fuel prices.
Do the new currency rules affect ordinary savers?
Not directly. They apply to banks and to companies or traders who use currency contracts. One analyst quoted by Moneycontrol said banks may pass the extra cost on to their customers.
Sources
- Reserve Bank of India, Press release: RBI announces special window for Public Sector Oil Marketing Companies to meet dollar requirements, 10 October 2026
- Reserve Bank of India, Press release: RBI Announces Regulatory Measures for the Foreign Exchange Market, 10 October 2026
- The Indian Express (George Mathew), RBI opens dollar lifeline for oil PSUs as rupee comes closer to 97, crude tops $100, 10 October 2026
- The Financial Express, RBI opens special dollar window for oil PSUs: What does central bank’s move mean for rupee?, 10 October 2026
- Business Standard (Manojit Saha), RBI opens special dollar window for oil firms as rupee comes under pressure, 10 October 2026
- Moneycontrol, RBI opens oil dollar window, tightens forex trades to arrest rupee slide, 10 October 2026