The Hindu Business Line : External debt up 5.5% in quarter-ended Sept 2007

New Delhi, Dec 31 The country’s external debt rose 5.5 per cent to $190.5 billion at end-September 2007, an increase of $9.9 billion over the external debt level of $180.6 billion at end-June 2007.

About $5 billion of this increase is explained by valuation change arising out of weakening of US dollar against major international currencies and Indian rupees, an official release said.

The major currency of denomination in India’s external debt portfolio continued to be US dollar, accounting for 52.8 per cent of total external debt at end-September 2007.

For the period April-September 2007, external debt stock in terms of US dollars has risen by $21 billion (12.3 per cent) from about $169 billion at end March 2007, of which $7 billion was accounted for by depreciation of US dollar in the international market. The rise in external debt outstanding over the quarter ended September 2007 was essentially brought about by a rise in external commercial borrowings, NRI deposits, multilateral debt and short term debt.

The share of long-term debt in total external debt at end-September 2007 was 83.8 per cent ($159.7 billion). Component wise, under long-term debt, multilateral and bilateral debt rose by $1 billion and $0.8 billion to $37.1 billion and $16.7 billion respectively.

Export credit outstanding showed an increase of $0.8 billion, touching $8.5 billion. The stock of commercial borrowings at $51.8 billion and NRI deposits at $43.6 billion was higher by $4 billion and $1 billion respectively, as compared to those at the end of the preceding quarter. Rupee debt remained broadly at the same level of around $2 billion as at the end of previous quarter.

Commercial borrowings accounted for the highest share of 27.2 per cent in total external debt outstanding at end-September 2007. As a proportion of the external debt, NRI deposits accounted for 22.9 per cent of the total debt at end-September 2007, followed by multilateral debt at 19.5 per cent and bilateral debt at 8.7 per cent. Export credit and rupee debt accounted for 4.5 per cent and 1.1 per cent respectively.

In the case of short-term credit, the coverage has been made more comprehensive, with the inclusion of suppliers’ credit up to six months and investment by Foreign Institutional Investors’ in short-term debt instruments. As at end-September 2007, short-term debt stood at $30.8 billion, accounting for 16.2 per cent of the total external debt.

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