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The Economic Times
The Economic Times
Business

$127 billion deposits raise new rupee risk as banks face future FX interest bills

MUMBAI: Indian banks have left much of their future interest ​payments on overseas FX deposits unhedged, creating ​a source of potential dollar demand that could compound depreciation pressure ​in a rupee-weakening scenario, five bankers said.

Lenders have raised more than $127 billion in such deposits since the central bank introduced them as part of one-off measures to strengthen India's balance of payments in the face of surging oil ‌prices in June.

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