India’s external debt declined by $2.5 bn in Q1 FY23

The external debt to GDP ratio declined to 19.4% at end-June 2022 from 19.9% at end-March 2022

September 29, 2022 08:11 pm | Updated 10:40 pm IST - Mumbai

India's external debt during the first quarter of 2022-23 declined by $2.5 billion to $617.1 billion over end-March 2022, the Reserve Bank said on Thursday.

The external debt to GDP ratio declined to 19.4% at end-June 2022 from 19.9% at end-March 2022.

"At end-June 2022, India’s external debt was placed at $617.1 billion, recording a decrease of $2.5 billion over its level at end-March 2022," according to the RBI's data on India’s External Debt as of end-June 2022.

Valuation gains due to the appreciation of the U.S. dollar vis-a-vis the Indian rupee and major currencies, such as yen, SDR and euro were placed at $14.4 billion.

"Excluding the valuation effect, external debt would have increased by $11.9 billion instead of a decrease of $2.5 billion at end-June 2022 over end-March 2022," the central bank said.

At the end-June 2022, long-term debt (with an original maturity of above one year) was placed at $487.3 billion, recording a decrease of $10.6 billion over its level at end-March 2022.

On the other hand, the share of short-term debt (with an original maturity of up to one year) in total external debt increased to 21% at end-June 2022 from 19.6% at end-March 2022.

U.S. dollar-denominated debt remained the largest component of India's external debt, with a share of 54.7% at end-June 2022, followed by debt denominated in the Indian rupee (30.4%), SDR (6.3%), yen (5.1%), and the euro (2.8%).

The outstanding debt of the general government decreased, while non-government increased at end-June 2022.

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