External Commercial Borrowings

On 21st January, 2022, the Reserve Bank of India released a Working Paper titled “India’s External Commercial Borrowings: Determinants and Optimal Hedge Ratio”.

It examines the determinants of External Commercial Borrowings (ECBs) raised by firms in India and identifies an optimal hedge ratio for the ECBs portfolio.

External Commercial Borrowings (ECBs)

  • ECBs represent a major component of India’s overall cross-border capital flows which are influenced by various pull and push factors.
  • These are in the form of cash bonds, securitised instruments, preference shares (non-convertible/optionally or partially convertible) and some hybrid instruments such as Foreign Currency Convertible Bonds (FCCBs) and Foreign Currency ....
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