India’s RBI Limits Refiners’ Dollar Purchases to Clear Iran Oil Dues: Report
TEHRAN (Tasnim) – The Reserve Bank of India (RBI) has capped weekly dollar purchases by the country’s oil refiners to pay off their debts to Iran in order to avoid pressure on the rupee, a report said.
"RBI wants to stagger payments to Iran to pre-empt any undue volatility in the domestic forex market," a source told Reuters on Monday.
The rupee touched a near three-month low of 67.77 to the dollar last week, partly due to dollar purchases to settle a portion of the Iranian oil dues the week before.
On May 21, the Indian government paid the first part of its outstanding oil dues to Iran in euros through Turkey's Halkbank.
India's oil ministry has asked state refiner Mangalore Refinery and Petrochemicals Ltd (MRPL) to coordinate with other firms to ensure that weekly payments do not exceed $500 million.
"A $500-$700 million per week kind of flow should be easily absorbed by the market," said a senior foreign exchange trader at a state-owned bank with knowledge of the RBI's guidance.
It was the first payment to Iran by India since the removal of anti-Tehran sanctions and it is not yet known when the second instalment will be paid.
Essar Oil has to pay Iran about $3.1 billion, Mangalore Refinery and Petrochemicals Ltd owes $2.8 billion, and Indian Oil Corp owes $581 million. HPCL-Mittal Energy Ltd (HMEL) has to pay $97 million and Hindustan Petroleum Corp owes $29 million.
