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Dollar sale to oil firms won't help rupee: SBI

Dollar sale to oil firms won't help rupee: SBI

State Bank of India on Friday said RBI's direction to oil companies to procure half of their dollar requirements directly from a select group of PSU banks will not help stem the fall in rupee.

State Bank of India on Friday said RBI's direction to oil companies to procure half of their dollar requirements directly from a select group of PSU banks will not help stem the fall in rupee.

"I don't think it increases overall availability of dollars or it improves the rupee-dollar price," SBI Chairman Pratip Chaudhuri told reporters after the bank's annual general meeting here.

He said the bank carries a dollar position of up to $10 million on a daily basis and to support the large demand from oil marketing companies and Reliance Industries , the single largest importers of crude, it will have to raise money from the open market.

Concerned over rupee's downslide which touched an all time low of 57.37 a dollar on Friday, RBI today asked oil firms, which are the largest buyers of the US currency, purchase 50 per cent of their dollar needs directly through a public sector bank.

RBI feels that oil firms seeking a single quote for their dollar requirement, instead of present practice of floating enquiring with several public and private sector banks, would help check volatility and arrest the free-fall of the rupee.