http://www.livemint.com/Opinion/YbbNBahgO3BUEIU9pcqrfM/QuickEdit.html
Here is a startling fact. Since 2008, dollar credit has grown faster outside the US than inside it, according to a paper published this month by the Bank for International Settlements. Nearly a third of that was to emerging markets such as India. These numbers are proof that the extraordinary monetary expansion by the US Federal Reserve via quantitative easing has spilt over into emerging markets, as people such as Reserve Bank of India governor Raghuram Rajan have been saying for long.
The sharp increase in dollar liabilities in the emerging markets is not just because of higher growth but also because companies substituted it for local currency debt, given the rock-bottom interest rates in the US. That could soon change as the US central bank inches towards an interest rate hike while the dollar rally strengthens. Several firms have taken dollar loans in the books of their offshore subsidiaries, so the official foreign debt figures are perhaps underestimates.
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