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 11st-order: RBI eases ECB rules and lowers hedging costs, making dollar debt cheaper for Indian firms.
- Step 22nd-order: Indian companies refinance rupee loans with offshore dollar debt, reducing domestic credit demand and tightening rupee liquidity.
- Step 33rd-order: Reduced domestic credit demand pressures Indian banks' lending margins; increased dollar demand puts depreciation pressure on INR.
- Step 44th-order: INR depreciation raises input costs for UK SMEs importing from India; tighter rupee liquidity may delay payments to UK suppliers.
Source: IN:Mint
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