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Most Indian companies protected from the rupee depreciation: Moody’s

The persistent weakening of the Indian Rupee against the dollar generates revenue in the rupee, but it relies heavily on US dollar-denominated debt to fund its operations, which negatively credits Indian companies with fairly high dollar-based costs. When it comes to Moody’s Investors Service. The Indian rupee has been declining since mid-March.

On April 27, 2021, the Indian Rupee closed at about 74.66 against the US dollar. This is about 3% lower than the mid-March level.

India has reported a record daily increase in coronavirus infection and is urging new blockades and restrictions to curb the spread of the pandemic. This, in turn, raised concerns about the country’s economic recovery and currency fluctuations.

“Most companies have protection to limit the effects of currency fluctuations, including some natural hedges where companies generate revenue in US dollars or have contracts priced in US dollars. Includes a combination of these factors that help with US dollar earnings and financial hedging, or restrictions. Even under more serious condemnation scenarios, the burden on cash flows and leverage, “reports Annalisa Di Chiara, senior vice president of Moody. It is stated in the book.

“As a result, weaker credit indicators under the scenario where the rupee falls another 15% against the dollar can be addressed within the company’s current rating level. Related to US dollar debt over the next 18 months. There is also the risk of refinancing. Most companies are repeat issuers, and others are government-owned or linked entities with good access to the capital market, making them easier to manage. “

Moody’s report covers 22 rated India-based companies across different sectors.

Fiber2Fashion News Desk (RKS)

The persistent weakening of the Indian Rupee against the dollar generates revenue in the rupee, but it relies heavily on US dollar-denominated debt to fund its operations, which negatively credits Indian companies with fairly high dollar-based costs. When it comes to Moody’s Investors Service. The Indian rupee has been declining since mid-March.



Most Indian companies protected from the rupee depreciation: Moody’s

Source link Most Indian companies protected from the rupee depreciation: Moody’s

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