Gulf News reported that New Delhi India may continue paying for Iranian oil in foreign currencies until European Union sanctions take effect in July when buyers will start using rupees. Two people with knowledge of the matter said that India will waive taxes on rupee payments for crude. That raised speculation refiners will start settling its oil bill with Iran in local currency to avoid international sanctions. While India could start paying for about 45% of the oil in rupees from next month, the countries prefer to settle trades in foreign tender such as euros. Mr Jonathan Cavenagh Singapore based currency strategist at Westpac Banking said that "We have been bearish on the rupee and this is just another reason to sell the currency. The news is indeed negative for the rupee as it will increase demand for dollars in an already tight environment and further pressure the central bank's reserves."

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