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MUMBAI: With the rupee crashing to a record low of 73.77, plunging 43 paise from previous closing mark of 73.34, the Reserve Bank of India (RBI) moved to improve dollar supply by allowing oil companies to raise foreign currency loans for their working capital requirements. The move falls short of the market expectation that the central bank would sell dollars directly to oil companies, and will not result in an immediate inflow of dollars. But, it will help preserve the RBI ’s reserves and bring in more forex when oil companies start borrowing.The rupee's free fall has been accentuated by crude oil breaching the $85 per barrel level. The dollar has gained almost Rs 10 this year — the highest since the Rs-15 appreciation in 2013 following the taper tantrums.The next external event that the market is awaiting is the RBI monetary policy committee (MPC) action, which will be announced on Friday. “With the rupee’s slide, there would be the impact of imported inflation,” said Madan Sabnavis, chief economist at Care Ratings . According to Sabnavis, the rupee will be one of the factors that will prompt the RBI MPC to hike rates by 25 basis points (100 bps = 1 percentage point) on Friday. He also feels that the RBI might ease liquidity by releasing some of the bank deposits that are currently impounded with it through its cash reserve ratio (CRR) prescription.The new norms have done away with the individual borrowing limit of $750 million or its equivalent. For the industry, the borrowing limit has been capped at $10 billion. According to bankers, state-owned companies will not have any problem raising funds as they are supported by the government.The RBI has allowed companies to raise funds for three to five years under the ‘automatic’ route, which means that the process can start immediately without waiting for permission or clearances. Until now, companies could raise funds for a maximum term of five years. Curiously, the central bank also did away with the hedging requirement. While unhedged borrowing will reduce the cost of funds if the rupee remains steady, oil companies could see repayments surge if the rupee continues to weaken and their borrowings are unhedged.According to foreign exchange dealers, plugging the incessant demand for dollars by oil companies is key to stabilizing the rupee. Some importers hold back if there are signs that the rupee might stabilize. The demand from oil companies , however, is constant as most of the country’s fuel requirements are met through imports.