External debt $136.5 bn end September

New Delhi, Dec 29: India's external debt stood at 136.5 billion dollars at the end of September, 2006, which is an increase of 4.3 billion dollars over the previous quarter.

The external debt stock was 132.2 billion dollars at end-June 2006. The increase in external debt outstanding at end-September 2006 essentially resulted from a rise in external commercial borrowings, NRI deposits and short term debt.

In terms of components, long-term debt outstanding at 125.9 billion dollars at end-September 2006 showed an increase of 2.8 billion dollars over the quarter.

Under long-term debt, multilateral debt rose by 493 million dollars which was partly offset by a drop in bilateral credits by 100 million dollars.

Export credit outstanding rose by 165 million dollars. The stock of commercial borrowings at 32,462 million dollars was higher by 1,363 million dollars as compared with those at the end of the preceeding quarter.

While Rupee debt remained broadly at the same level as at the end of previous quarter, NRI deposits rose by 912 million dollars to 36,563 million dollars.

Short-term debt increased by 16.2 per cent over the quarter to 10,579 million dollars at end-September 2006 on account of a rise in trade credits. Increase in trade credits is attributed to higher import bill during the current year.

In terms of their share in total debt stock, Non-Resident deposits accounted for 26.8 per cent of the total debt at end-September 2006, followed by multilateral debt at 24.6 per cent and commercial borrowings at 23.8 per cent. The share of bilateral debt was 11.5 per cent. Export credit and Rupee debt accounted for 4.1 percent and 1.4 per cent respectively.

The share of short-term debt was 7.8 per cent of the total debt.

India's foreign currency reserves including foreign currency assets of the RBI, gold, SDRs and Reserve Tranche Position in the International Monetary Fund stood at 165.3 billion dollars as at the end of September 2006.

Foreign currency assets of the RBI were of the order of 158.3 billion dollars as on September 30, 2006 providing a cover of around 116 per cent to total external debt stock.

US dollar continued to be the major currency of denomination in India's external debt portfolio. The share of US dollar in the debt stock of the country increased further from 45.4 per cent at end-March 2006 to 46.7 per cent at end-September 2006.

An official release here claimed that the government was pursuing prudent external debt management policies to maintain external debt within manageable limits. These include emphasis on raising funds on concessional terms and from less expensive sources with longer maturities, monitoring of short-term debt, prepaying high cost loans, rationalising interest rates on NRI deposits, restricting end-use of external commercial borrowings, limiting trade credits and encouraging non-debt creating capital flows.

UNI