India's external debt rises to USD 557.4 billion end-June 2019

Mumbai: The country's external debt stood at USD 557.4 billion in the June quarter, an increase of USD 14.1 billion over the quarter ended March 2019, the Reserve Bank said.

Valuation losses due to the depreciation of the US dollar against the rupee and other major currencies were placed at USD 1.7 billion. Excluding the valuation effect, the increase in external debt would have been USD 12.4 billion instead of USD 14.1 billion at end-June 2019 over end-March 2019.

Commercial borrowings remained the largest component of external debt, with a share of 38.4 per cent, followed by non-resident deposits (24 per cent) and short-term trade credit (18.7 per cent), the RBI said in a release.

The long-term debt was at USD 447.7 billion at end- June 2019, recording an increase of USD 12.8 billion over its level at end-March 2019. The share of short-term debt in total external debt declined to 19.7 per cent at end-June 2019 from 20 per cent at end-March 2019.

The ratio of short-term debt to foreign exchange reserves declined to 25.5 per cent at end-June 2019 as against 26.3 per cent at end-March 2019. US dollar-denominated debt continued to be the largest component of the country's external debt, with a share of 51.5 per cent at end-June 2019, followed by the rupee (34.7 per cent), yen (5.1 per cent), SDR (4.7 per cent) and the euro (3.2 per cent).

The borrower-wise classification shows that the outstanding debt of both government and non-government sectors increased at end-June 2019. Debt service declined to 5.8 per cent of current receipts at end-June 2019 as compared with 6.4 per cent at end-March 2019, reflecting lower repayments of commercial borrowings.

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