Commodity Online
MUMBAI: Larsen and Toubro (L&T)which lost Rs 200 crore for 2007-08 fiscal in commodity hedging is likely to convert as much as $200 trillion of its dollar debt to rupee.

The largest engineering and construction company in india is planning such a move to negate any currency risk in view of the volatile dollar-rupee rates. The news of loss on account of hedging was followed by plummeting of L&T share prices last week, company sources said. 

L&T, which repaid $200 million of yen loans by borrowing in dollars in September, is seeking to lower its foreign exchange exposure after one of its subsidiaries incurred commodity hedging losses.

The Indian rupee is Asia's second-worst performing currency against the dollar this year after posting its biggest rally in more than three decades in 2007. This makes it harder for exporters and companies with overseas sales to make accurate forecasts.
The rupee advanced after the Federal Reserve cut its main lending rate by three-quarters of a percentage point in a bid to prop up the faltering U.S. economy and restore faith in the financial system.

The Fed has lowered its benchmark overnight rate six times and the discount rate eight times since the middle of August, when the collapse of U.S. subprime mortgages started to infect markets around the world.

Share prices of L&T rose 102.05 rupees, or 3.7 percent, to 2,866 rupees at Bombay Stock Exchange. The stock has declined 31 percent this year after more than doubling in 2007.

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