The Hindu Business Line : External debt jumps $6.9 b

Among the components of the debt, External Commercial Borrowings (ECBs) recorded the largest increase at $5.4 billion, reflecting strong domestic investment activity. At the end of June, ECBs rose to $30.97 billion compared with $25.56 billion at the end of March.

According to the RBI, the increase is also partly attributed to the decline in stock of ECBs at the end of March, since net disbursements had remained low due to the principal repayment of India Millennium Deposits in 2005-06. Under ECB, commercial bank loans and foreign currency convertible bonds accounted for the major increase during this quarter, said the RBI release.

While NRI deposits recorded the largest contribution to external debt at 27 per cent, it declined from 28.1 per cent at the end of the previous quarter. It contributed $35.65 billion at the end of June, against $35.13 billion at the close of March.

Trade credit above one year was at $5.45 billion against $5.33 billion in the same period. Trade credit up to one year contributed $9.196 billion, compared with $8.788 billion.

As much as 46.1 per cent of the external debt is in the US dollars, while 18.9 per cent is in Indian rupee.

India's foreign exchange reserves exceeded the external debt by $30.8 billion providing a cover of 123.3 per cent to the external debt stock at the end of June.

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