Foreign Exchange Market

The Continuity Constant

 As indicated in the mid-term Reviews of October 2001 and 2002 and reiterated in the annual policy Statement of April 2003, RBI has been expressing concern over unhedged foreign currency borrowings by corporates.

 However, it is noticed that despite such exhortations, hedging has not been ensured. This may entail significant but avoidable risks to some corporate balance sheets, possibly impacting the quality of banks