Rupee fall: Did RBI ask PSU banks not to purchase dollars?

Mumbai The rupee spiked, breaching 56 to the dollar, on market chatter that the RBI has asked state oil companies to restrict purchases of dollars through four state-run banks, but senior officials from the RBI and oil firms said the talk was not true.

A senior official at the Reserve Bank of India called the rumours “preposterous” and said he was not aware of any such directive being issued.

[caption id=“attachment_327708” align=“alignleft” width=“380” caption=“RBI has asked state oil companies to restrict purchases of dollars through four state-run banks. Reuters”]  [/caption]

Senior officials from state-run oil companies HPCL and BPCL also denied receiving any such directive.

Multiple traders said they had received text messages about the reported directives, but nobody could confirm the source of these messages.

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The rupee gained to as much as 55.73 to the dollar on the talk, but retreated to 56.07/08 after the denials. The local unit had hit a record low of 56.52 earlier in the session.

Reuters