In order to align its business operation, engineering major Punj Lloyd plans to convert part of its rupee debt into dollar debt. Profitability of the firm took a hit because of the mismatch between the interest payment on debt (which is mostly in rupees) and revenue (which is mostly in dollar). While the company derives 65-70 per cent of its business from abroad, its 65-70 per cent of debt is in rupe
Tag: rupee
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RBI takes further steps to contain rupee weakness
In order to contain the depreciation of rupee against the dollar, the Reserve Bank of India (RBI) raised the cost of borrowing under the marginal standing facility by 200 basis points. Further, the central bank restricted the amount of money that banks can borrow from its LAF window to just 1 per cent of deposits at Rs 75,000 crore citing the need to "restore stability to the foreign exchange mar
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OMCs raise petrol price 4th time in 6 wks
On the backdrop of the depreciation of rupee against dollar, state-run oil marketing companies (OMCs) raised the price of petrol by a steep Rs 1.55 a litre, excluding local sales tax or VAT. According to the traditional price revision cycle, the change in the petrol price should be effective from July 16. But it was raised a day earlier. The hike, which is the fourth time in six weeks, comes as the falling value of rupee against the dollar incre
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Under-recovery set to rise to Rs 1.5 trillion
According to government sources, under-recovery on the sale of fuel products by state-run oil marketing companies (OMCs) at subsidised price may be around Rs 125,000 crore and Rs 150,000 crore in 2013-14. This estimate is sharply higher than the government's earlier estimate of Rs 80,000 crore because of a considerable depreciation of rupee and the marginal rise
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Rupee strengthens against dollar due to regulatory steps
Owing to a slew of measures taken by Reserve Bank of India (RBI) and SEBI and also because of improvement in foreign capital inflows, Indian rupee is strengthening marginally against dollar. After depreciating to a record low of 61.21 some days ago, the Indian rupee strengthened to 59.65 against the dollar, the most since June 28. The recent strengthening of rupee is also helped by the sale of dollar by banks and exporters, reports indica
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Rupee depreciation to hit Indian firms badly
A note from CRISIL Research shows that only half of the foreign exchange exposure of Indian companies is hedged. As on March 31, Indian companies had $200 billion of foreign currency debt and 45 per cent of this was short-term, a study by rating agency CRISIL shows. Mukesh Agarwal, President, CRISIL Research, said a significant portion remained unprotected from the volati
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OMCs to buy dollar from state-run banks
In order to contain volatility in rupee exchange rate, state-run oil marketing companies (OMCs) agreed to buy dollars for importing crude oil from a single public sector bank. This follows the direction by Reserve Bank of India (RBI) to these companies to use a special window for buying dollars
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RBI tightens trading norms to curb volatility in currency mkt
In a bid to curb volatility in the currency market, Reserve Bank of India (RBI) prohibited banks from taking proprietary position in the currency futures and exchange-traded currency options market. This effectively restricts them to transact only on behalf of clients. Banks carry out currency trading on behalf of their clients while they have a separate desk to trade in the foreign exchange market of their own. The latter is
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RBI may take steps to arrest rupee weakness
Some market analysts expect Reserve Bank of India (RBI) to take steps to arrest further depreciation of rupee against the dollar. In order to meet the demand for dollar to import crude oil by oil marketing companies (OMCs), RBI may look at opening a special window from where these firms could buy dollars. A large part of demand for dollar comes from OMCs and if this demand is eliminated from the m
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CII survey calls for reforms to stem rupee weakness
A survey conducted by industry body Confederation of Indian Industry (CII) highlights the importance of economic reforms in arresting the depreciation of rupee against dollar.Some of the key reforms mentioned by the participants of the survey are relaxing the sectoral cap on foreign direct investment (FDI), controlling fuel and fertiliser subsidies, removing hurdles to infrastructure proje