Indian companies book large losses on their rupee hedges

Many Indian exporters with large currency hedges booked on the basis the rupee would strengthen were caught unaware by the financial crisis.

Corporate India's fiscal 2009 results show that local companies have lost hundreds of millions of dollars from bad currency hedges - and in some instances this has wiped out their entire profit.

India's growing exports of services and, to a lesser extent, goods resulted in total export revenues of $155 billion in fiscal 2008, up 23% from the previous year. Exports earn foreign currency while expenses are in rupees, so companies...

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