Foreign currency loans have decreased sharply from $11 billion to $2.91 billion, due to the weakening of the Indian rupee against dollar. So pls don’t rush to raise in foreign currency loans now as rupee is weakening against dollar.
Pls understand, rupee weakening results in higher repayment costs, as more rupees are needed to buy dollars at the time of repayment. (Forward cover prices will go up, simply hedging cost)
However, export-driven companies that earn in dollars can better manage these costs since their earnings in dollar provide them a natural hedge against currency fluctuations.
So keep this in mind whenever you think of raising funds in foreign currency.
We advise our client against taking foreign currency loans and all are happy as of now 🙂