Stopping the flows

BS OPINION

 At that time, with the one-year dollar Libor ruling at around 1.3 per cent, the maximum rate of interest on NRE deposits worked out to 2.3 per cent. If the depositor wished to hedge his deposit one year forward, he would have had to pay a premium of 1.3 per cent, which meant that his deposit earned a return of 1 per cent on a fully hedged basis.

 Today, those interest rates haven