Buy half the needed dollars from a PSU bank: RBI to oil cos

With rupee touching all-time low of Rs 57.30 to a US dollar, the Reserve Bank has directed state-owned oil firms to buy half of their dollar requirement for oil imports from a single public sector bank.

RBI feels that oil firms seeking a single quote for their dollar requirement, instead of present practice of floating enquiring with several pubilc and private sector banks, would help check volatility and arrest the free-fall of the rupee.

"RBI letter (asking oil marketing companies to buy US currency from a single public sector bank) has come to the government. We are in correspondence with the oil companies to make sure they comply with the directive," Oil Secretary G C Chaturvedi told reporters here.

The three big state oil firms need about USD 8 billion every month for import of crude oil and some petroleum products like LPG.

Chaturvedi said RBI has asked only the state-owned oil marketing companies to buy half of their daily foreign exchange needs from a public sector banks and the rest could be sourced through competitive bids from public and private banks.

Private sector Reliance Industries and Essar Oil, who between them import over 40% of crude oil shipped to India annually, will continue to buy dollars as per their company policies.

Rupee today hit a record low of 57.30, down Re 1 from yesterday's close, on sustained capital outflows and strong demand from oil importers for the American currency. "Presently, oil companies seek dollar quotes from multiple banks, giving an exaggerated impression of their demand for dollar. This leads of strengthening of US dollar against the rupee," he said.