The $65 Billion Gamble Endangering the Economy

It unintentionally creates this moral hazard. It becomes like a free insurance

policy. And so firms that are borrowing in dollars overseas, they start bothering

to protect themselves. Precisely. They become less likely to hedge their dollar exposures

because they start to believe they're insulated from that volatility. So is that number,

the US $65.49 billion in unhedged external borrowings, is that big enough to really be a problem?

What happens if the rupee suddenly drops 10%? It matters immensely. $65 billion is a

significant number. If the rupee depreciates by 10%, suddenly the cost of paying back that

debt in local currency jumps by 10% instantly. Yeah. That could wipe out a company's