India's INTL investment position improves by $4.57 BLN

New Delhi, June 27 (UNI) Spurred by direct investments abroad, India's International Investment Position (IIP), compiled at the end of December showed a negative 43.23 billion dollars, an improvement of around 4.57 billion dollars over end-September 2006.

The IIP which is Asset-Liabilities consist of the country's financial claims on non-residents and financial liabilities consist of the country's financial liabilities to non-residents.

These transactions pertain to monetary authority, government, banks, and other sectors (including corporate sector).

According to a statement released by RBI the improvement in IIP was mainly due to growth in reserve assets, direct investment abroad, trade credits and Currency and Deposits.

Reserve Assets remained the most dominant component of the external assets, registering an increase of 11.95 billion dollars as at end-December 2006 over end-September 2006.

Direct Investment abroad, Trade Credits and Currency and Deposits increased by 6.39 billion dollars, 3.86 billion dollars and 2.54 billion dollars respectively, as at end-December 2006 over as at end-September 2006, said RBI.

The Total Reserve Assets as at end-December 2006 exceeded the entire external debt of 142.7 billion dollars at the same reference period by around 34.55 billion dollars.

The major part of country's external assets is in the form of reserve assets followed by other investment and direct investment Abroad.

However, RBI says the share of reserve assets in total external assets of the country declined from 83.39 per cent as at end-September 2006 to 78.95 per cent as at end-December 2006.

On the liability front, around 48.10 per cent of the country's external liabilities were in the nature of other investments, i.e.

trade credits, loans, currency and deposits and other liabilities, as at end-December 2006.

In the total external liabilities of the country, loan and 'currency and deposits were having 28.47 per cent and 14.7 per cent share respectively whereas trade credit had accounted for around 4.39 per cent share as at end-December 2006.

UNI