OMC forex window likely to taper over next 1-2 weeks

One of the main reason for the stability returning to the Indian rupee is because of the special dollar window provided by the central bank to oil marketing companies (OMCs). Sources in the finance ministry say that window will be tapered soon, reports CNBC-TV18’s Aakansha Sethi.

RBI will begin to shut down the special window that had been opened for OMCs dollar demand. It will be a very slow and gradual taper so that market can absorb the excess demand for dollars and there is weakening of the rupee. No final ratio has been arrived at, but CNBC-TV18 learns that it could be 75:25 ratio whereby 25 percent of the demand will be shifted to the open market and 75 percent will remain in the special window, a decision on this is likely over the next one week to fifteen days. The RBI governor had also alluded to restoring normalcy in the demand for OMC dollars and a decision on this is now soon possible.