• Notification Date: 05-03-2025
• Notification No: N/A

RBI’s $15B Swap Cuts Currency Risk, Eases Overseas Loans for Indian Firms

The Reserve Bank of India (RBI) has launched a $15-billion dollar-rupee swap, a strategic move that's making borrowing cheaper foreign currency easier for Indian companies.

The action led to the fall in the Mumbai Interbank Forward Offer Rate (MIFOR), an important reference point for currency risk pricing, reducing the cost of hedging for companies bringing dollar funds to India.

By purchasing dollars from banks at a promise to sell them back after three years, the RBI has in effect added liquidity, easing pressure in the market. As a result, non-bank lenders and corporates are able to borrow cheaper foreign funds, and foreign borrowing becomes attractive.

This move not only supports the forex market but also provides a sound financial environment for domestic companies that are ready to invest abroad. Indian businesses can now search for sources of funds globally with lower hedging fees and lower exchange rate risk.

A game-changer for companies looking towards global expansion!