# RBI faces dilemma from US policy spillovers – BIS paper - Central Banking

> 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.

- Date: 2021-05-28 · published 2021-05-28T12:00:00.000Z
- Category: macro · region India · magnitude low
- Page: https://feedsoft.ai/events/47389-rbi-faces-dilemma-from-us-policy-spillovers-bis-paper-central-banking
- Commodities: [Indian Rupee (INR per USD)](https://feedsoft.ai/c/USDINR.md)

## Why it matters

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.

## Sources

- centralbanking.com: https://www.centralbanking.com/central-banks/monetary-policy/international/7838801/rbi-faces-dilemma-from-us-policy-spillovers-bis-paper

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Data from Feedsoft AI (https://feedsoft.ai/). For information only; not investment advice.