The country’s net international investment position (IIP) or the difference between the nation’s external financial assets and liabilities, improved on the back of a fall in the value of foreign—owned assets in the country, according to the RBI data.
The net claims of non—residents on the country, as reflected in the net IIP, decreased by USD 12.8 billion to USD 296.2 billion on the back of a USD 10.6—billion fall in the value of foreign—owned assets for the quarter ended September, the Reserve Bank said today.
Better position was helped by a rise in the value of residents’ financial assets abroad, which increased by USD 2.2 billion in the same period, it added.
The foreign—owned assets in the country declined by USD 10.6 billion to USD 732.9 billion largely on account of a USD 13.3—billion reduction in the portfolio investments, while direct investment was down USD 2.9 billion, the report said.
Though there was a net inflow of USD 6.6 billion for the quarter to September, volatile exchange rates resulted in equity liabilities in dollar terms decreasing by USD 10.2 billion to USD 330.5 billion primarily due to the steep rupee fall, the RBI said.
The rupee lost nearly 14 per cent in the year, making it the second worst emerging market currency after the Indonesian rupiah, while the equities in dollar terms lost 3 per cent but gained 9 per cent (Sensex 9 and Nifty 6.6 per cent) in rupee terms, according to market data.
The reserve assets continued to dominate the country’s international financial assets with a 63.5 per cent share, followed by direct investment abroad at 27.5 per cent, it said.
On the liabilities front, the pack was led by direct investment with 29.6 per cent, followed by portfolio investment of 23.1 per cent, loans at 23.1 per cent and trade credit at 12.2 per cent, the RBI said.