The Reserve Bank of India (RBI) Governor Sanjay Malhotra has said that recent RBI measures, including the creation of a special dollar window for oil marketing companies (OMCs), aim to ensure orderly movements in the foreign exchange market and curb undue speculative activity. Recently, the RBI tightened rules governing forex derivative trades to curtail speculative bets against the rupee and asked banks to set aside a 20 per cent reserve for dollar purchases. The special window for three state-owned OMCs, which are among the largest consumers of dollars due to their crude oil import requirements, was introduced following an assessment of prevailing market conditions. The rupee has been appreciating against the US dollar since October 9, 2026.
Malhotra said the RBI is determined to do whatever is necessary to ensure orderly movements in the foreign exchange market. He said the primary objective of these measures is to maintain orderly conditions in the forex market. The reserve requirement was introduced in response to observations of excessive speculative positioning on the buy side. He added that the other major announcement was essentially a re-articulation of existing requirements, largely procedural in nature, concerning the documentation required.
He further said that domestic growth is performing well across all fronts. Banks are well-capitalised, profitable and growing, indicating that the banking sector is in good health. He noted that there are initial signs of corporate investment, with companies remaining profitable and earnings growth improving. Household balance sheets are also resilient and strong. Although household leverage has increased, balance sheets remain robust. Overall, he said India’s macroeconomic fundamentals and financial institutions are robust. He also emphasised the need to closely monitor evolving geopolitical headwinds and their potential impact on the Indian economy.
