Liberalizing foreign borrowings for oil companies to raise to USD 10 billion will not have a "material" impact on arresting the slide of the rupee, Bank of America Merrill Lynch (BofAML) said Thursday. The government's earlier moves like tariff hikes on non-essential items were also "not significant either", the American brokerage said in a note.

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"Liberalisation of public sector undertaking oilco ECBs (external commercial borrowings) up to USD 10 billion is not very material," it said. The move announced Wednesday evening will be partly offset by their reducing short-term forex credit, which it estimated at USD 15 billion during the fiscal.

The RBI "cannot afford" opening a special swap window for oil importers as is being speculated, it said. The brokerage explained that pre-committing USD 8 billion a month for it over and above the USD 25-30 billion lost in interventions since April will push the overall forex reserves below the critical eight-month import cover mark.

It can be noted that such a window was last opened in August 2013, during the last episode of a slide in the rupee. It was followed up with an NRI bonds issue, which successfully arrested the slide as the diaspora put in USD 26 billion. The brokerage voted for a similar move this time around as well to help the rupee.

It said USD 30-35 billion Thursday be raised through a similar programme and stressed that it is better than a rate hike by the RBI or restrictions on gold imports.

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The rupee closed at a new low of 73.34 against the US dollar Wednesday, after brent breached the USD 86-per-barrel mark. The domestic currency has shed over 12 percent this year to be one of the worst performing currencies in the world.