Beyond the Dollar: India's Railway Finance Explores CHF and ILS for INR Risk Mitigation

India’s Railway Finance Corporation is strategically evaluating the conversion of its USD-dominated debt portfolio into alternative currencies including Swiss francs and ILS, aiming to hedge against the Indian rupee’s persistent weakness. This move reflects a calculated approach to foreign exchange risk management as the INR has depreciated 6% against the dollar over the past twelve months, creating significant pressure on entities with substantial international obligations.

The Rupee Challenge: Understanding INR Depreciation Pressures

The weakening of the Indian rupee has forced state-owned enterprises to rethink their currency exposure strategies. As INR continues to face headwinds from capital outflows and global monetary tightening, companies are exploring solutions beyond traditional dollar holdings. The Railway Finance Corporation’s consideration of Swiss franc loans represents a pragmatic response to this challenge, allowing institutions to reduce their vulnerability to INR volatility while managing funding costs more effectively.

BRICS-Backed Currency Diversification: A Broader Movement

The initiative aligns with ongoing BRICS discussions aimed at reducing dependence on the U.S. dollar as the primary international settlement currency. Rather than remaining exposed to dollar-centric arrangements, participating nations are encouraging their major corporations to explore alternatives. The shift toward CHF, ILS, and other stable currencies forms part of a larger strategic pivot within emerging economies, signaling a fundamental change in how cross-border payments and financing arrangements are structured.

Diversified Currency Strategy: Financial Benefits Beyond ILS and INR Exchange

By strategically deploying Swiss francs and ILS alongside traditional currencies, Indian enterprises can achieve multiple objectives: reducing foreign exchange losses, lowering borrowing costs in alternative funding markets, and building resilience against currency-specific shocks. The Railway Finance Corporation’s exploration of this approach demonstrates how institutions can simultaneously address immediate INR pressures while positioning themselves for a more multipolar international financial architecture.

Market Implications: When INR Stability Meets Global Currency Shifts

This strategic repositioning signals that Indian state-run enterprises are taking proactive steps to protect stakeholders from escalating currency risks. As more corporations mirror the Railway Finance Corporation’s approach—moving beyond USD and exploring options including ILS, CHF, and other alternatives—we can expect to see a gradual shift in how international loans are structured within India’s financial ecosystem. The trend underscores the growing importance of INR risk management in corporate treasury operations.