Mumbai: The Indian rupee, which had been under pressure due to strong demand for US dollars for global trade including crude oil purchases, strengthened in early trade on Monday.
To curb the demand for dollars in the open market, the Reserve Bank of India (RBI) introduced a new mechanism allowing public sector oil companies to obtain dollars directly from the central bank.
The RBI also tightened rules around rupee-linked foreign exchange derivative contracts. Re-booking after cancellation has been restricted, and a 20% cash margin has been made mandatory for certain forex contracts.
Following these measures, the rupee gained 94 paise against the US dollar at the start of trading. The exchange rate moved from 96.72 to 95.77 per dollar.
Market expectations are that if such RBI actions continue, the rupee could see further gains in the coming days.
