Document Type
Article
Abstract
The US is India's largest trading partner, followed by the European Union. Our study, using the GVAR model, shows that a US monetary policy (MP) shock results in a depreciation of the Indian currency vis-a-vis the dollar. This is due to Indian investors preferring to invest in the US, which provides higher returns during a US MP shock. The Eurozone MP shock does not have a significant impact due to the increasing dollarization of the Indian economy. However, the US MP shock propagation diminishes when there is economic policy uncertainty. Our findings have implications for monetary policy conduct in India.
Recommended Citation
SALISU, AFEES A.
(2024)
"India and the Rest of the World: Analyses of International Monetary Policy Spillovers,"
Bulletin of Monetary Economics and Banking: Vol. 27:
No.
3, Article 8.
DOI: https://doi.org/10.59091/2460-9196.2280
Available at:
https://bulletin.bmeb-bi.org/bmeb/vol27/iss3/8
First Page
573
Last Page
600
Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License
Country
Nigeria
Affiliation
Centre for Econometrics and Applied Research, Ibadan, Nigeria
