Mumbai, Feb. 4 -- A sharp and sustained fall in the US dollar against other major currencies could turn into a recessionary shock for the global economy outside the United States, according to an analysis highlighted in a report by BofA Securities.

The report explained that a sharply weaker dollar would likely slow growth in the rest of the world. As global growth outside the US weakens, it would create deflationary pressures, forcing other countries to respond with monetary policy easing.

This reaction, in turn, would limit how far the dollar can fall, as policy responses abroad would act as a natural floor to further depreciation.

The report said, "A large real depreciation of the dollar vis-a-vis other currencies would be a recessio...