India Inc has increased hedging of FX loans: RBI

Weighted average maturity for first quarter of this fiscal is 7.5 years

The Reserve Bank of India (RBI) said on Tuesday Indian corporates have increased the hedging of their foreign currency loans. In the past, the regulator had flagged the risks that corporate unhedged exposures were posing to the system.

“The hedging percentage has improved. For example for whole of last year 2014-15, the hedging ratio was around 39 per cent and in the first quarter of this year it has gone up close to 41 per cent. If you see the weighted average maturity, for the whole of last year it was 6.5 years, and for first quarter of this fiscal it is 7.5 years,” said RBI Deputy Governor H R Khan in a post-monetary policy conference call for analysts and researchers.

Meanwhile, on Tuesday, the rupee ended at 63.75 compared with its previous close of 64.04 a dollar. The rupee ended at a near two-week high against the dollar. The rupee had ended at 63.58 on July 22. The rupee gained due to dollar sale by banks and exporters.