MUMBAI: The Indian rupee is set to open higher on Friday after a Reuters report that the central bank took steps to reduce the impact of dollar buying by state-run oil refiners.
The rupee will rise to 92.94-92.98 versus the US dollar, traders said, having settled at 93.1950 on Thursday.
The RBI urged state-run oil refiners to curb spot dollar purchases and to tap a special credit line for their foreign exchange needs, Reuters reported late Thursday.
That RBI is taking on more steps to support the currency that will help rupee push higher at open, Anil Bhansali, head of treasury at Finrex Treasury Advisors, said.
He pointed out that the rupee would be opening on a positive note despite the rise in oil prices on Thursday and weak Asian cues.
“Not sure how durable the impact will be, and we see limited downside for dollar/rupee from here, likely capped around 92.75,” he said.
The central bank had used a similar measure during the Russia-Ukraine war to support the currency amid a surge in oil prices.
State-run refiners are being prodded to meet the daily payment needs by accessing dollar credit lines through State Bank of India, three people familiar with the matter said.
Oil refiners buy dollars on a daily basis, typically executing trades through several banks, and bankers have cited these flows as a source of pressure on the rupee in recent days.
The step complements measures already taken by the RBI to support the rupee, including a clampdown on arbitrage trades between the onshore OTC and offshore NDF markets, as well as on speculative activity by corporates.
Tepid Asian cues
Asian equities and currencies were weaker, pressured by a jump in oil prices on Thursday.
Brent crude rose 4.7% on Thursday before pulling back in Asia, with markets focused on developments around the Iran conflict.
American Dollar Exchange Rate