RBI Weighs Forex Hedge Subsidy as India Battles Rupee Pressure and Dollar Outflows - Tekedia

India’s central bank is weighing subsidized forex hedging to make overseas borrowing cheaper for banks and companies.

The proposal could boost dollar inflows and help ease pressure on the rupee without relying as heavily on reserves.

Banks say lower hedging costs would encourage more foreign currency borrowing, currency swaps, and external commercial borrowing.

Officials are reviewing the idea as oil imports, capital outflows, and broader external-account stress weigh on India’s finances.