The Reserve Bank of India is weighing the broader economic gains from foreign-currency deposits against the cost it bears to hedge the associated currency risk, Governor Sanjay Malhotra said on October 7.
Malhotra defended the rationale behind the now-closed special facility for Foreign Currency Non-Resident (Bank), or FCNR(B), deposits, saying the central bank’s primary consideration was the overall benefit to the economy rather than the hedging expense involved.
