Median estimate in a Bloomberg survey shows the Indian rupee will slip to 69 per dollar by end-2017. Photo: HTMumbai: The Reserve Bank of India’s (RBI) commitment to a stable rupee is having an unintended consequence: local companies are getting complacent about hedging their overseas borrowings. A gauge of expected rupee swings fell the most after Russia among 23 emerging markets over the last two years, thanks to the RBI’s regular interventions in currency markets and its success in boosting India’s reserves. The central bank has said from time to time that it doesn’t target a specific rupee level and intervenes only to smooth volatility. “The current bout of dollar weakness is a good opportunity for corporates to increase their hedge ratios,” said Standard Chartered’s Narayan.

Source: Mint February 20, 2017 04:54 UTC