Indian Banks' Unhedged FX Exposure Sparks Rupee Stability Concerns
Indian banks are facing significant unhedged interest payment risk on over $127 billion in overseas FX deposits, increasing potential dollar demand and depreciation pressures on the rupee.
The Reserve Bank of India's swap facility covers principal FX risk but leaves the currency exposed during oil price shocks due to unhedged interest outflows.
The GBP/INR pair is trading at ₹129.11, with bullish momentum holding despite overbought signals limiting upside scope.