RBI, oil firms discuss potential dollar purchase measures: Sources

Jun 22, 2012 |

Reuters

mumbai

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The Reserve Bank of India has discussed with state-run oil firms steering 50 per cent of their dollar purchases via a single state-owned bank, though no decision has been made, two oil executives said on Friday.

The move is intended to smoothen market volatility caused by current dollar purchases by oil companies which is done through competitive bidding by banks and can lead to price disruptions.

Both executives said the RBI's directive was under consideration internally but no decision had been reached.

Under the discussion, oil companies would carry on with USD purchases for the remaining 50 per cent of their needs via the current competitive bidding system.

Oil firms are the largest buyers of dollars in the domestic currency market. On Friday, the rupee hit a life low of 57.25 per dollar, due to dollar purchases by oil and gold importers and global risk aversion.

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