India could consider reviving several crisis-era currency support measures if pressure on the rupee continues amid rising crude oil prices, weak capital inflows and concerns around energy supply disruptions, according to a report by MUFG Bank.
Michael Wan, analyst at MUFG Bank, said policymakers may need to explore additional intervention tools similar to those deployed during the 2013-rupee crisis.
The report noted that authorities have already introduced multiple measures to support the currency, including higher import duties on gold, restrictions on silver imports, tighter scrutiny of the non-deliverable forward market and gradual increases in domestic fuel prices.
However, MUFG cautioned that some of these steps could create side effects such as higher hedging costs and weaker sentiment among foreign bond investors.
The bank outlined several potential measures that could be considered if rupee pressure intensifies further.
These include tighter rules under the Liberalised Remittance Scheme (LRS), restrictions on outward investments, additional curbs on gold imports, and special foreign exchange arrangements for oil marketing companies.
Among the measures highlighted, MUFG pointed to the possibility of launching an FCNR(B)-style swap window aimed at mobilising foreign-currency deposits from non-resident Indians.
The bank noted that a similar programme introduced during the 2013 currency crisis had attracted billions of dollars in deposits and borrowings, helping stabilise the rupee during that period.
MUFG also discussed the possibility of foreign-currency bonds targeted at NRIs, relaxation in external commercial borrowing norms, and dedicated dollar-sourcing facilities for oil importers.
According to the report, a special forex window allowing oil marketing companies to access dollars outside the open market is among the more likely interventions if volatility increases.
MUFG said the rupee remains vulnerable across different scenarios due to a combination of weak capital inflows, a widening current-account deficit and uncertainty linked to the Strait of Hormuz.
Wan said India’s capital flow challenges existed even before the latest geopolitical tensions and reflected broader balance-of-payments changes.
The report stated that net direct investment inflows have weakened sharply as foreign companies increasingly repatriate profits and capital, making the rupee more dependent on volatile portfolio investments.
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MUFG believes India may need stronger intervention measures to stabilise the rupee if oil prices remain elevated and capital flow pressures continue, although the bank said long-term currency stability will depend on deeper economic and investment reforms.
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Published on: May 25, 2026, 9:17 AM IST
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