PSU oil companies now sourcing all $ needs from market: RBI
3 Dec 2013 11:00 PM GMT
‘Beginning last week, the public sector oil marketing companies (OMCs) have started accessing the FX market for their entire daily dollar demands,’ the RBI said in a statement.
The central bank also said it will consider opening the swap window, which had been made available to OMCs since August end, on rare days when there is a pronounced spurt in dollar demand. The OMCs have been advised to smoothen their daily dollar demand so that bunched up demand on a particular day is covered in advance in the forward forex market or covered on days with low demand.
Indian Oil Corp, Bharat Petroleum Corp and Hindustan Petroleum Corp, the three OMCs, are the biggest buyers of dollars, requiring $8-8.5 billion every month to import an average 7.5 million tonnes of crude oil. On 28 August, when the rupee touched an all-time low of 68.85 against the dollar, the central bank opened a swap window for the OMCs to meet their foreign exchange requirements directly from the RBI. Since then, pressure on the rupee has eased. The RBI said the OMCs have also been advised to utilise revolving lines of credit made available by banks with the specific objective of tiding over humps in dollar demand.
In the backdrop of broad stability returning to the forex market, the RBI said the OMCs have been allowed to source dollars beyond their normal daily requirements. ‘This process has already been put in place last week and it is expected that the excess demand of the OMCs will be funnelled to meet their swap (second leg) commitments over a period of time,’ it added.
The RBI said it is closely monitoring the market and will continue to keep all options open regarding the settlement of oil marketing company swaps, including rupee settlement.
Counter-cyclical buffer: RBI for having 2.5% of core capital
Mumbai: A specially constituted Reserve Bank of India (RBI) panel on Monday submitted its draft report on implementing the counter-cyclical capital buffer framework that called for setting aside up to 2.5 per cent of the risk weighted assets based on the credit-to-GDP ratio and growth in gross NPAs of banks. ‘While the credit-to-GDP gap shall be used for empirical analysis to facilitate CCCB decision, it may not be the only reference point... (it) may be used in conjunction with other indicators like gross non-performing assets (GNPAs) growth for CCCB decisions in the country,’ the RBI said in a statement.
The Reserve Bank of India had constituted the internal working group, headed by executive director B Mahaptra, to look into the feasibility of mandating banks to set aside a part of earnings during the good days which can come handy in rainy days and ensure that financial systems do not come under strain when going gets tough.
The central bank also said it will consider opening the swap window, which had been made available to OMCs since August end, on rare days when there is a pronounced spurt in dollar demand. The OMCs have been advised to smoothen their daily dollar demand so that bunched up demand on a particular day is covered in advance in the forward forex market or covered on days with low demand.
Indian Oil Corp, Bharat Petroleum Corp and Hindustan Petroleum Corp, the three OMCs, are the biggest buyers of dollars, requiring $8-8.5 billion every month to import an average 7.5 million tonnes of crude oil. On 28 August, when the rupee touched an all-time low of 68.85 against the dollar, the central bank opened a swap window for the OMCs to meet their foreign exchange requirements directly from the RBI. Since then, pressure on the rupee has eased. The RBI said the OMCs have also been advised to utilise revolving lines of credit made available by banks with the specific objective of tiding over humps in dollar demand.
In the backdrop of broad stability returning to the forex market, the RBI said the OMCs have been allowed to source dollars beyond their normal daily requirements. ‘This process has already been put in place last week and it is expected that the excess demand of the OMCs will be funnelled to meet their swap (second leg) commitments over a period of time,’ it added.
The RBI said it is closely monitoring the market and will continue to keep all options open regarding the settlement of oil marketing company swaps, including rupee settlement.
Counter-cyclical buffer: RBI for having 2.5% of core capital
Mumbai: A specially constituted Reserve Bank of India (RBI) panel on Monday submitted its draft report on implementing the counter-cyclical capital buffer framework that called for setting aside up to 2.5 per cent of the risk weighted assets based on the credit-to-GDP ratio and growth in gross NPAs of banks. ‘While the credit-to-GDP gap shall be used for empirical analysis to facilitate CCCB decision, it may not be the only reference point... (it) may be used in conjunction with other indicators like gross non-performing assets (GNPAs) growth for CCCB decisions in the country,’ the RBI said in a statement.
The Reserve Bank of India had constituted the internal working group, headed by executive director B Mahaptra, to look into the feasibility of mandating banks to set aside a part of earnings during the good days which can come handy in rainy days and ensure that financial systems do not come under strain when going gets tough.
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