The Indian rupee opened stronger on Friday and continued to gain ground in early trade, rising to around 92.86 against the US dollar, as policy support from the Reserve Bank of India (RBI) helped ease pressure in the foreign exchange market.
The currency appreciated by nearly 25–28 paise from its previous close, tracking improved sentiment after reports that the RBI has introduced a special dollar arrangement for state-run oil marketing companies. Under this mechanism, oil firms can access dollars through a credit facility instead of purchasing directly from the spot market.
This move is aimed at reducing immediate demand for dollars from large importers such as Indian Oil Corporation, Bharat Petroleum, and Hindustan Petroleum, which typically account for a significant share of daily forex demand. Traders said the step has helped smooth out pressure on the rupee and improved short-term stability.
Market participants added that the rupee also benefited from steady domestic equity performance and a slightly improved global risk tone. However, gains were capped by a firm US dollar in global markets, which continues to weigh on emerging market currencies.
RBI’s action is primarily focused on managing volatility rather than defending a specific exchange rate level. By shifting oil-related dollar demand away from the spot market, the central bank is attempting to reduce sharp fluctuations in the currency.
