The Reserve Bank of India is looking at all measures to defend the depreciating rupee and has not ruled out the option of a special window to sell dollars to oil companies, said Deputy Governor Subir Gokarn.
Further, Gokarn said that the sharp depreciation of the rupee poses upside risks to inflation, but the fall in Brent crude oil prices is a relief. Brent crude has slipped below the $100 per barrel mark on Friday.
The Indian rupee breached key psychological levels and hit all-time low of 56.39/$1 earlier this week. The currency is down over 6% since January.
However, the RBI is not contemplating a sovereign bond issue to attract dollars, Gokarn said adding that the central bank did not instruct oil companies to buy dollars only through select public sector banks.
On Thursday, the rupee rose sharply on rumours that the RBI has told state-owned oil companies to buy dollars only through select public sector banks.
Gokarn said that capital flows to India could be hit if Greece exits the eurozone and that the RBI is mindful of the risks from such an event.
Gokarn said that the impact of the petrol price hike by the government on inflation would be insignificant.
