BoJ shadow over a low-cost loan window for India Inc

Bank of Japan hikes rate to a three-decade high of 0.75%; India Inc says impact will be muted

- CHRISTINA TITUS, RAGHAVENDRA KAMATH & KISHOR KADAM

WHILE THE BANK of Japan's (BoJ) decision to raise interest rates by 25 basis points to 0.75%-the highest level in three decades-could increase financing costs on yen borrowings and amplify foreignexchange losses on unhedged loans, Indian companies are taking it in their stride - at least for now.

Consultants and rating agencies, however, cautioned that yen borrowing and hedging costs are likely to rise. Soumyajit Niyogi, director at India Ratings & Research, said “the combined impact of capital flows and higher yen borrowing costs remains a key risk to monitor for Indian companies."