The Indian rupee's plummeting volatility, mainly due to the central bank's stranglehold on the currency, is leading both importers and exporters to hedge less of their foreign exchange exposure.
This, in turn, means companies run the risk of being caught off-guard when volatility picks up, exacerbating swings in the currency.
"When a currency is less volatile, exporters and importers are less willing to hedge their exposure," said Arun Bansal, executive director at IDBI Bank. Importers will be reluctant to pay the forward premium to hedge when the rupee is trading in a narrow range, said Bansal. "The sideways movement in USD/INR has reduced the tendency to hedge," said Anshul Chandak, head of treasury at RBL Bank.
Norge Siste Nytt, Norge Overskrifter
Similar News:Du kan også lese nyheter som ligner på denne som vi har samlet inn fra andre nyhetskilder.
USD/CHF Price Analysis: Refreshes eight-year low around 0.8550The USD/CHF pair is struggling to maintain auction after printing a fresh eight-year low around 0.8552 in the European session. The Swiss Franc asset
Les mer »
Analysis: European earnings face a low bar, but investor patience wears thinEuropean stocks may manage to emerge from this earnings season in the black, despite China's faltering economy and persistent global inflation, as expectations are so low that investors are likely to warmly welcome any positive surprises.
Les mer »
USD/INR Price Analysis: Indian Rupee pares weekly losses above 100-EMA as US inflation cues loomUSD/INR Price Analysis: Indian Rupee pares weekly losses above 100-EMA as US inflation cues loom – by anilpanchal7 USDINR Technical Analysis Inflation ChartPatterns SwingTrading
Les mer »
Indian PM Modi faces no-confidence vote over handling of Manipur violenceModi's Bharatiya Janata Party has a clear majority in the lower house of parliament, so the no-confidence vote will not impact its stability but will allow the opposition to trigger a debate over the ethnic clashes.
Les mer »
Tomato price shock hits Indian restaurants, cheaper puree sales boomMany Indian restaurants are cutting back on tomatoes in their popular dishes and consumer companies are ramping up production of cheaper purees that are flying off the shelves, after prices surged more than 500%.
Les mer »
Chinese, Indian investment professionals show strong support for CBDC in new surveyThe CFA Institute conducted a member survey about attitudes toward central bank digital currency and received widely varying responses.
Les mer »