MUMBAI, Sept 19 Reuters Indian firms are opting for crosscurrency swaps to convert part of their rupee debt into dollars in an attempt to trim borrowing costs as U.S. interest rates decline, six bankers told Reuters.

The Federal Reserve began easing with a largerthanexpected 50 basis point rate cut on Wednesday and is projected to reduce borrowing costs by a total of 200 bps over the next 15 months, as per the central bank39;s forecast.

Two Indian conglomerates, a local unit of a global investment firm, and a renewable energy company recently used crosscurrency swaps to convert rupee liabilities into dollars, a banker at a foreign bank said.

The banker did not want to be named because he is not authorized to speak to the media.

Crosscurrency swaps are derivative structures that allow companies to convert loan principal, interest repayments, or both, from one currency to another, helping manage interest rates and forex risk.

Those expecting lower U.S. rates in the future may consider converting INR liabilities to floatingrate USD liabilities through currency swaps, or principalonly swaps, as a costreduction measure, Ashhish Vaidya, managing director and treasurer, global financial markets at DBS Bank India, said.

Banks and foreign exchange advisors are suggesting clients use the 2year tenure for the currency swap because it is offering the highest interest rate saving currently, the bankers said.

The U.S. secured overnight financing rate SOFR, a benchmark rate for…