Importers and foreign currency loan borrowers have increased their hedging, taking advantage of the crash in forward premium after the Reserve Bank of India (RBI) offered $5-billion swap facility with banks, according to currency dealers. The one-year forward premium for dollar-rupee was 4.11 per cent a month back, and 4.05 per cent a week back, but is now at 3.57 per cent.
The premiums are likely to rise as more companies come forward to hedge. Forward premium is the fee a supplier of dollar takes to commit to supply dollar at the end of the agreed period. The central bank ...
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