According to a Reserve Bank of India (RBI) Working Paper, the optimal hedge ratio for the External Commercial Borrowings (ECBs) raised by firms in India is estimated at 63 per cent for the periods of high volatility in the foreign exchange (forex/FX) market. An optimal hedge ratio is a ratio that implies the percentage of total asset or liability exposure that an entity ought to hedge against exchange rate fluctuations.
Buy Prime Test Series for all Banking, SSC, Insurance & other exams
According to the Paper, domestic economic activity and movements in the exchange rate of the Indian rupee are the two major factors influencing the ECBs issuance. Depreciation of the Indian rupee has an adverse impact on the issuance of ECBs in the short as well as long run.
Houses are not just places to live; some are grand, luxurious, and larger than most…
Asia is one of the fastest-growing regions in the world and is home to many…
India has formally begun preparing its military leadership for the wars of the future. On…
Union Bank of India has announced a key leadership change with the promotion of Shri…
India’s biodiversity has gained fresh attention after scientists discovered a new orchid species in Kerala’s…
Punjab’s aviation map witnessed a symbolic and developmental shift on 2 February 2026. Prime Minister…