Mumbai: India Inc.’s record pace of debt fundraising may be set to slow as a jump in hedging costs makes those deals more expensive. Falling dollar borrowing costs and improved investor appetite for emerging-market debt have driven the spree. Forward premiums in the local currency market shot up to the highest since May 2017 last week as demand for hedging contracts surged. The central bank has also not swapped dollars for rupees since April, which helped cool increases in forward premiums. The Reserve Bank of India swapped a total of $10 billion in March and April, with demand topping targets at both months’ currency swap auctions.

Source: Mint July 04, 2019 03:00 UTC