DOES FOREIGN EXCHANGE RESERVE AFFECT EXTERNAL COMMERCIAL BORROWINGS – INDIAN PRAGMATIC INDICATION

Abstract

A central bank of the country that controls foreign exchange reserves by implementing the policies and procedures, which results the valuations of currency. In a supple polices on exchanges rates the valuation activities prompting involuntarily, due course the supply and demand of the foreign currencies are adjusted by bought and sold. External Commercial Borrowings (ECB) also not exempted from that, objectively study attempt to prove it. By using the various statistical tools, the research found and strongly believes that both the time series, Fx Reserves and External Commercial Borrowings had mutual relationship during the elected study period.