Indian companies with US dollar loans on their balance sheets, as well as importers, are rushing to cover unhedged foreign currency exposures after the Federal Reserve's latest resolve to restrain inflation stoked concerns of continued fund outflows from India. This might hasten the rupee's depreciation.
With exporters also holding on to their earnings in anticipation of a further drop in the currency, odds are shortening on a demand surge for hedging instruments in the currency market.
Source: economictimes.indiatimes.com