Long-term solution for dollar/rupee liability

Background: The Indian rupee has been in an appreciating mode, rising close to 5% last year amid strong capital flows and a surplus current account. It is widely believed that it will continue to appreciate over the medium term.

This, combined with a low federal funds rate, has prompted a lot of corporates to move their liabilities from rupee to US dollar in the past year and keep the FX risk unhedged. These flows and lack of hedging from corporates with existing dollar liabilities have

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