Next pain point for the rupee: $79 billion of unhedged offshore loans

Indian companies are rushing to hedge their overseas dollar debt against further declines in the rupee, a process that threatens to cascade into additional losses for the battered local currency.
 

The nation’s firms had $79 billion of unhedged offshore loans at the end of March, about 44% of their total overseas borrowings, according to the latest data from the Reserve Bank of India. The cost of repaying that has been soaring as the rupee has tumbled more than 7% this year.

“We have seen increased activity among corporates to hedge their dollar exposure ever since USD/INR broke above 79,” said