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India’s exterior debt elevated by $11.5 billion sequentially in October-December 2021 to $ 614.9 billion, in comparison with the second quarter, official information launched on Thursday confirmed. It rose by $46.6 billion on a year-on-year foundation for the quarter below assessment.
Nevertheless, as a proportion of the Gross Home Product (GDP), the exterior debt declined barely to twenty per cent as of December-end 2021 from 20.3 % as of September-end 2021.
India’s exterior debt continues to be sustainable and prudently managed, mentioned the Finance Ministry within the quarterly exterior debt report for the quarter ended December 31, 2021.
It highlighted that the the short-term debt, on a residual maturity foundation, accounted for 43.1 % of the overseas trade reserves as on December 31.
The appreciation of the US greenback in opposition to different main currencies such because the euro and yen helped restrict the rise within the exterior debt. Valuation achieve because of appreciation of the US greenback VIS-a-vis main currencies similar to Euro, Yen and particular drawing rights was positioned at $ 1.7 billion.
“Excluding the valuation impact, the rise in exterior debt would have been $13.2 billion as a substitute of a rise of $11.5 billion at end-December 2021 over end-September 2021,” mentioned the Finance Ministry.
As a lot as 52.0 per cent of the exterior debt was denominated in US {dollars} as on the finish of December 2021. Rupee debt constituted 32 per cent, whereas that in yen and euro made up 5.3 per cent and three.1 per cent, respectively.
Commenting on the exterior debt report, Madan Sabnavis, Chief Economist, Financial institution of Baroda, mentioned that exterior debt of india has elevated by $46.6 billion on a y-o-y foundation. “Nevertheless, the sustainability ratios have been maintained with the debt/gdp ratio at 20 per cent. Whereas the foreign exchange reserves cowl ratio is 103 per cent, this is able to have slipped within the final month with foreign exchange reserves dipping. Nevertheless, a canopy ratio of 90 per cent plus remains to be comfy. The ratio of short-term debt has elevated to 18.1 per cent from September, however remains to be decrease than the pre-pandemic occasions”, he mentioned.
The vast majority of the exterior debt is personal. Basic authorities exterior debt stood at $131.4 billion as on December 31 was down from $132.0 billion as on the finish of September 2021. Non-government exterior debt, in the meantime, rose to $483.6 billion from $471.4 billion.
Business borrowings remained the most important chunk of the exterior debt, with a share of 36.8 %. Non-resident deposits observe with 23.1 % and and short-term commerce credit score is the third-largest element at 18.0 %.
When it comes to maturity, debt with an authentic maturity of as much as one 12 months rose to 18.6 % of the overall exterior debt from 17.4 % as on September 30. Whereas it is a small quantity, short-term debt on a residual maturity foundation – debt that should be repaid within the subsequent 12 months regardless of authentic maturity – rose to 44.4 % of the overall from 43.2 % on the finish of September 2021.
In absolute phrases, the exterior debt due in 2022 stood at $273.0 billion.
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March 31, 2022
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