Branch² Intelligence
India Inc eyes more dollar debt as RBI policy support kicks in
Key takeaway
RBI eased ECB rules and lowered hedging costs, making dollar debt cheaper for Indian firms.
- Step 1RBI eases ECB rules and lowers hedging costs, making dollar debt cheaper for Indian firms.
- Step 2Indian companies refinance rupee loans with offshore dollar debt, reducing domestic credit demand and tightening rupee liquidity.
- Step 3Reduced domestic credit demand pressures Indian banks' lending margins; increased dollar demand puts depreciation pressure on INR.
Source: IN:Mint
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