New Delhi: The finance ministry on Thursday said that it has allowed forex borrowings for working capital by Oil Marketing Companies (OMCs) under the automatic route with immediate effect.
OMCs will borrow USD 10 billion with a maturity of 5 years in a phased manner, with an initial tranche of USD 4 billion followed by two tranches of USD 3 billion each, all borrowing completed in a period of one year from now, the finance ministry said in a release.
OMCs will not be required to hedge their exposure, it added.
At present, OMCs are allowed to raise ECBs from direct or indirect shareholders or a group company if the loan is for an average maturity of five years.
There has been a talk around the possibility of opening a special swap window for OMCs, as was done in previous episode of slide in the rupee like in 2013. The rupee has lost over 15 percent this year, prompting government and the RBI to launch a series of measures to contain volatility including tariff hikes on imports.
With PTI Inputs