Hole In India’s Pocket Shrinks: External Debt Declines By $14.9 Billion As Of June, Says RBI

India’s external debt has fallen by 2.8 per cent as per Reserve Bank of India’s latest findings, Economic Times has reported.

The fall in debt is due to decreased commercial borrowings, short-term debt and non-resident Indian (NRI) deposits. At the end of June, India’s external debt stood at $514.4 billion, down by $ 14.9 billion compared to March 2018.

“Valuation gains due to the appreciation of the US dollar vis-a-vis the Indian rupee and major currencies (viz, Japanese yen, euro, SDR, and pound sterling) were placed at USD 13 billion. Excluding the valuation effect, the decrease in external debt would have been USD 1.9 billion instead of $ 14.9 billion at end-June 2018 over end-March 2018,” the RBI report said.

India’s external debt consists of commercial borrowings which constitute 37.8 per cent of the debt, followed by NRI deposits which account for 24.2 per cent of debts. Short-term credit accounts for 18.8 per cent. US Dollar denominated debt constitutes 50 per of India’s external debt. Rest of the external debt is in Rupees, SDR, Japanese Yen and Euro as per RBI.