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A Bank for International Settlements working paper by Banerjee and Mohanty finds that Indian non-financial firms increasingly borrow in US dollars. As a result, rupee depreciation triggered by US monetary tightening can be contractionary for India.
The paper presents a policy dilemma for the Reserve Bank of India.
US monetary tightening could weaken the rupee and raise the cost of dollar-denominated imports, while also slowing the Indian economy. This is a macro policy consideration with little direct effect on feed commodity prices.
centralbanking.comCentral Banking NewsdeskMay 28, 2021Not enough comparable past events yet for a historical read.
Moves of each commodity's benchmark from the last close before the event. Historical reads pool past events of the same kind; they describe what happened, not what will. Not investment advice.
