Excessive reliance on foreign currency funds could pose balance sheet risks for Indian corporates during volatility in global markets, Reserve Bank of India deputy governor H.R. Khan said.
"Heightened volatility makes the debt rollovers difficult or at high interest rates," Mr. Khan said in a presentation at the Bankers' Club in Thiruvananthapuram.
The presentation was published on the central bank's website on Tuesday.
Indian companies' foreign borrowings have gone up sharply due to availability of funds at cheap rates and the central bank has reiterated its concerns over unhedged forex exposures.
The Indian rupee hit record-lows on Tuesday on fears of the US tapering down its quantitative easing programme, triggering concerns over losses due to unhedged forex exposures.
Copyright: Thomson Reuters 2013
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