Monetary policy transmission in the Indian context: Capital flows with a focus on external commercial borrowings

Abstract

This paper has attempted to understand the impact of capital flows on the monetary policy transmission in India. It focuses on the effect of the revised External Commercial Borrowings (ECB) framework on the amount, the purpose and the maturity period of borrowings. The revised External Commercial Borrowings (ECB) framework was implemented on November 30, 2015. The study goes on to identify if the revised guidelines have any bearing on the nature and composition of borrowing. This research has tried to find stylized facts and relationship between all the factors measured by RBI relating to the External Commercial Borrowings in India.