RBI opened Forex Swap Window for Oil Marketing Companies
The Reserve Bank of India on 2th August opened a forex swap window for three public sector oil marketing companies to calm volatile forex markets. IOC, HPCL and BPCL are the three companies which are benefited by this facility. RBI will lend dollars to oil marketing companies for equivalent rupees which the marketing companies would return over a period of time.
According to RBI's notification, "Under the swap facility, the Reserve Bank will undertake sell/buy USD-INR forex swaps for a fixed tenor with the oil marketing companies through a designated bank.
The swap facility gets operationalised with immediate effect and will remain in place until further notice," This was done with an aim to reduce volatility in the rupee market which has been losing ground against the dollar. According to Market analysts, with this facility, the Reserve Bank is trying to reduce volatility in the rupee market.
Oil marketing companies can now swap rupee for dollars and after a definite time period return the dollars back to RBI. This will give time to the oil marketing companies to return dollars and also not affect the country's reserves. Even if the oil marketing company is not able to return the dollars in the said time frame the central bank has the option of rolling over the swap.
Try to answer this question
According to RBI's notification, "Under the swap facility, the Reserve Bank will undertake sell/buy USD-INR forex swaps for a fixed tenor with the oil marketing companies through a designated bank.
The swap facility gets operationalised with immediate effect and will remain in place until further notice," This was done with an aim to reduce volatility in the rupee market which has been losing ground against the dollar. According to Market analysts, with this facility, the Reserve Bank is trying to reduce volatility in the rupee market.
Oil marketing companies can now swap rupee for dollars and after a definite time period return the dollars back to RBI. This will give time to the oil marketing companies to return dollars and also not affect the country's reserves. Even if the oil marketing company is not able to return the dollars in the said time frame the central bank has the option of rolling over the swap.
Try to answer this question
1. Which one of the following are true about RBI's recent Forex Swap Window for Oil Marketing Companies?
1. The facility is opened for all Indian Oil Companies
2. The facility is meant to reduce the volatility of Indian Rupee
3. It is a measure from RBI to reduce the rupee depreciation
4. Through is facility Oil Companies can buy Oil using Indian Rupee instead of Dollars
Select the correct answer using the codes given below:
(a) 1, 2 and 3 Only
(b) 2 and 3 Only
(c) 1 and 3 Only
(d) 1, 2, 3 and 4
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