RBI's dollar sell-buy swaps reportedly slow rupee's fall but raise hedging costs

The Economic Times reports that the RBI's dollar sell-buy swaps—selling dollars now and agreeing to buy them back later—have helped slow the rupee's fall but raised forward premiums. The one-year dollar-rupee forward premium, including blended costs, rose from 7.40% to 8.65% in less than a month, then eased to 8.45% Thursday. A banker says the higher hedging costs could marginally discourage some foreign debt and portfolio inflows.