If the rupee
averages 73 to a dollar this year and crude oil, India’s biggest import, averages $76 a barrel for the remaining half of 2018, that could see the country’s oil
bill rise by Rs 457 billion, Soumya Kanti Ghosh, chief economic adviser at the State Bank, wrote in a note Thursday.
India’s short-term debt obligations, which included non-resident deposits as well as overseas commercial borrowings by companies, totaled $217.6 billion in 2017. Assuming 50 per cent has either been paid in the first half of 2018 or was rolled over to next year, the remaining amount to be repaid in rupees would be 7.1 trillion rupees computed using the average exchange rate of 65.1 per dollar in 2017.
“For the second half of the year, assuming that rupee depreciates to an average value of 71.4 per dollar, the debt repayment amount would be 7.8 trillion rupees,” he wrote. That would implying an extra cost of nearly 700 billion rupees. The analysis did not give details of hedging, if any.