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Dodging The Hedge Is Weighing Heavy On Indian Companies Seeking Foreign Debt
The upcycle in interest rates has sharply driven up the cost of hedging foreign currency borrowings.
03 Oct 2022, 09:08 AM IST
Financial conditions for companies seeking foreign debt have changed remarkably between March and August. The Secured Overnight Financing Rate—a benchmark interest rate for loans and derivatives denominated in U.S. dollars—has jumped 268 basis points from 0.3% in April to 2.98% in September, according to data from the New York Federal Reserve. "Sharp increase in SOFR and also for Indian benchmark has become a sore point for Indian co...
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