BusinessBreaking
Archived — This article has been archived. The information may be outdated.
NaBFID explores five-year dollar loan
NDTV Profit··10 Jun
India's National Bank for Financing Infrastructure and Development is in talks with banks to raise funds through a five-year dollar loan after the RBI introduced measures to encourage foreign currency inflows. Managing Director Rajkiran Rai said the lender is studying the special hedge window closely.
Prism
What It Means For You
- Cheaper borrowing for infrastructure lenders can eventually support roads, power, transport and other long-term projects.
- Foreign-currency loans are attractive only if hedging is affordable; otherwise rupee weakness can erase savings.
- RBI's swap window may reopen offshore markets for state-run borrowers that had paused because hedging costs were high.
What's Happening
- NaBFID is discussing a five-year dollar loan with banks.
- The RBI has offered state-run firms a concessional foreign exchange swap facility at 1.5 percent a year.
- NaBFID plans to raise $8 billion to $9 billion from domestic and offshore sources in FY27.
Infrastructure Funding Math
- Infrastructure finance needs long-tenor capital because projects take years to generate steady cash flows.
- Currency risk is central when Indian lenders borrow in dollars but fund rupee projects.
- Policy support that lowers hedge costs can shift the relative attractiveness of offshore borrowing.
all-newstop-storieseditors-picks
