Rate hike, rise in bond yields, rupee fall to hit India Inc margins

The rate hike and the consequent rise in bond yields and upward revisions in lending rates by banks will raise companies' funding costs

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Analysts say a bigger challenge for India Inc would be the expected decline in aggregate demand and thus lower top line growth

Krishna Kant Mumbai
India Inc stares at a further decline in operating margins and profitability in the coming quarters owing to the twin blows of a depreciation in the value of the rupee against major currencies and a rise in interest rates after a surprise intervention by the Reserve Bank of India (RBI) last week.

Analysts say the depreciation in the rupee, which touched a new low against the dollar on Monday, will raise the rupee prices of key industrial inputs such as oil, coal, industrial metals, bulk chemicals, agri-commodities, and imported components for manufacturing companies.

The rate hike and the consequent rise

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First Published: May 12 2022 | 12:32 AM IST

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