India's external debt eases to US$ 521.2 billion end December 2018

Short-term debt on a residual maturity basis constituted 43.5% of total external debt end December 2018

India's external debt witnessed a decline of 1.6% to US$ 521.2 billion at end-December 2018 over its level at end-March 2018, on account of decrease in commercial borrowings and trade credit. However, with respect to figures at end-September 2018, it has increased by 2.1% as at end-December 2018.

Valuation gains in external debt as at end December 2018 over September 2018, due to depreciation of the US dollar vis-a-vis the Indian rupee and other major currencies (viz., SDR, yen, euro, and pound sterling), were placed at US$ 20.6 billion. Excluding the valuation effect, the external debt as at end December 2018 would have been US$ 541.8 billion.

 

Commercial borrowings continued to be the largest component of external debt with a share of 37.4%, followed by NRI deposits (24.1%) and short term trade credit (19.9%).

At end-December 2018, long-term debt (with original maturity of above one year) was placed at US$ 417.3 billion, recording a decline of US$ 10.2 billion over its level at end-March 2018.

The share of long-term debt (original maturity) in total external debt at end December was 80.1%, lower than its level of 80.7% at end March 2018.

The share of short-term debt (with original maturity of up to one year) in total external debt increased to 19.9% at end-December 2018 from 19.3% at end-March 2018.

Short-term debt on a residual maturity basis (i.e., debt obligations that include long-term debt by original maturity falling due over the next twelve months and short-term debt by original maturity) constituted 43.5% of total external debt at end-December 2018 (as against 42.0% at end March 2018) and stood at 57.3% of foreign exchange reserves (as against 52.3% at end-March 2018).

US dollar denominated debt continued to be the largest component of India's external debt with a share of 45.9% at end December 2018, followed by the Indian rupee (24.8%), SDR (5.1%), yen (4.9%) and euro (3.1%).

The borrower-wise classification shows that the outstanding debt of both government and non-government sectors decreased at end-December 2018, in comparison to end-March 2018, however, increased in comparison to end-September 2018.

The ratio of short-term debt (original maturity) to foreign exchange reserves increased to 26.4% at end-December 2018 (as against 24.1% at end-March 2018).

The ratio of concessional debt to total external debt stands at 8.7% as at end December 2018, as against 9.1% as at end March 2018.

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