The Hindu Business Line : India pre-pays ADB loans worth Rs 5,294 crore

INDIA has pre-paid a portion of its foreign currency loans to the Asian Development Bank amounting to 123.11 billion Japanese yen (Rs 5,294.84 crore).

The prepayment was made by purchasing necessary foreign currencies from the Reserve Bank of India at the prevailing exchange rate, said a RBI press release.

The Government funded the prepayment by issuing a new dated security, the 5.32 per cent 2014 to RBI on a private placement basis on February 16, 2004, for Rs 5,000 crore, and paid the balance amount to RBI out of its cash balance.

The coupon of the security was fixed on the basis of prevailing secondary market yield for the 10-year government paper at 12.45 p.m. today.

Since the fresh rupee borrowings by the Government (through private placements with RBI) have been used exclusively to retire the foreign currency debt of equivalent residual maturity, the transaction does not have any implication on aggregate debt position of the Government, the release said.

The monetary impact of the additional borrowing through private placement is also neutralised by equivalent rupee payment by the Government to RBI towards purchase of foreign exchange, the release said.

In January this year, the Government pre-paid Rs 1,350 crore worth of Official Development Assistance (ODA) loans to Canada.

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