How India is taking steps to defend its falling rupee

India is supporting the rupee, which has fallen more than 7% against the U.S. dollar this year, through measures including channeling oil companies’ dollar demand, tightening hedging rules, and attracting capital inflows. The Reserve Bank of India has allowed three state-owned oil marketing companies to obtain dollars through a dedicated window starting October 12. It also requires a 20% foreign exchange risk reserve for derivative contracts hedging foreign currency demand in the current account, excluding transactions related to the capital account. The threshold for derivative transactions that do not require proof of underlying risk exposure has been lowered from $100 million to $5 million.