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The Reserve Bank of India has recently issued a directive to state-owned oil marketing companies to limit their purchase of US dollars from the spot market. Oil refiners are among the largest consumers of foreign exchange in India, and their sudden, large-scale dollar requirements can lead to significant volatility in the exchange rate. By shifting these transactions away from the immediate spot market, the central bank aims to stabilize the Indian rupee and manage the country's foreign exchange reserves more effectively.
Click to View MoreIndia and Japan renewed their USD 75 billion Bilateral Swap Arrangement, providing a two-way liquidity buffer to manage currency volatility and reinforce investor confidence. Beyond economic stability, it strengthens their Special Strategic and Global Partnership, signaling deep trust and supporting macroeconomic resilience amid global uncertainty.
Click to View MoreRising geopolitical tensions, policy uncertainty in the United States, and concerns over excessive reliance on the US dollar have accelerated the global trend of de-dollarisation, prompting central banks to diversify their foreign exchange reserves. A key outcome of this shift has been a strong surge in gold prices, as gold is seen as a safe, politically neutral store of value during times of financial and geopolitical instability. For India, the Reserve Bank of India has increased the share of gold in its reserves while gradually reducing exposure to dollar-denominated assets, strengthening the resilience and stability of the country’s external sector.
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