Jump in Hedging Costs Raises Dollar Funding Bill for India Firms
- Higher hedging charges are disrupting funding plans of issuers
- Hedging costs rose to their highest since May this month
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Indian companies are paying the most since May to hedge dollar borrowings, adding to strains at firms already stretched by the pandemic.
The six-month Mifor swap rate, a derivative that firms use to hedge against moves in rates with foreign-currency borrowings, has climbed 8 basis points this month to 4.6%. That’s near a seven-month high.