With rupee depreciating sharply against the US dollar, the Reserve Bank today ordered State-owned oil companies to purchase their dollar requirement from a single public sector bank for every daily transaction so as to curb volatility in the currency.







The decision follows yesterday’s meeting between RBI and oil firms to discuss measures to control volatility and high fluctuations in the exchange rate.

The central bank had last year suggested that refiners buy their dollar requirement from a single public sector bank to end speculation in rupee market caused by competitive quotes taken from multiple banks.

But the measure was never implemented as RBI did not give written order as sought by oil firms to end their practice of seeking competitive quotes.

Last year, RBI’s instruction on single bank purchase was not implemented as oil firms said that banks quote different rates and they were as per CVC’s guidelines required to discover the best rate through competitive bids.

The oil firms had asked RBI to give a written order mandating a particular bank for dollar purchases so that they are insulated from CVC action but the central bank did not issue any such order, sources said.

An option being mulled is to provide refiners a separate window to meet their needs.

Sources said oil companies at yesterday’s meeting explained to RBI their dollar requirement and that they inform the central bank 5 days in advance before dollar buying