| Abstract: | The growing levels of external commercial borrowings (ECBs) among the emerging and developing economies have raised the fears that ECBs would lead to widespread crisis and threaten financial stability in India. Against this backdrop, the current study seeks to examine the trends and critically evaluate the policy pertaining to ECBs. In order to immune the economy from potential exchange rate shocks, we suggest to having specific policy focus on the domestic bond market, hedging mechanisms, and appropriate decisions on the cap and level of ECBs by the regulator. |
