Iran oil payments not to impact currency markets: RBI

5 Dariya News

New Delhi 08-Oct-2015

India's central bank on Thursday clarified that the rupee's value will not be impacted in any way owing to the payment of $700 million to Iran for settling earlier crude oil import bills."As of now $1,400 million has been cleared, $700 million have been paid and $700 million have been acquired. Its ($700 million) has already been acquired, so there will be no impact in the (currency) market," Reserve Bank of India (RBI) Deputy Governor H.R.Khan said here on the sidelines of an event.The newly-purchased dollars worth $700 million will be the second tranche of payment to Iran for settling old crude oil import bills.Khan said that the remaining $700 million which has been purchased will be paid on the due date, which he, however, did not divulge.

The RBI deputy governor's assurance that the rupee value will not be impacted assumes significance as the Indian currency has been under some pressure lately due to yuan devaluation and choppy world equity markets.Recent measures like the RBI's September 29 decision to give greater access to foreign funds to invest in government-backed bonds have given some boost to the rupee.On Wednesday, the RBI notified its decision to give greater access to government-backed securities for foreign funds. The RBI's moves are expected to usher in around $2.5 billion by this fiscal end.

This led rupee to gain some stability in recent weeks. However, on Thursday, the rupee got depreciated by nine paise to close at 65.05 to a US dollar from its previous close of 64.96, which was an eight-week high.According to currency analysts, the RBI is current comfortable in rupee ranging anywhere between 65-66 to a US dollar. Any extrem movements due to volatility triggers the central bank to sell or buy dollars in the open market to stablise the rupee.