Economy News

External Debt: Valuation gains helped rein in external debt in FY23 – Mintpaisa

The valuation gain from the strong dollar helped keep external debt figures in check for FY 2022-23, as India rose less than one percent during the year.

At the end of March 2023, India’s external debt stood at 624.7 billion dollars, an increase of 5.6 billion Singapore dollars compared to its level at the end of March 2022. external debt would have increased by $26.2 billion instead of $5.6 billion at the end of March 2023 compared to the end of March 2022,” the Reserve Bank said in its latest statement.

Long-term debt with an original maturity greater than one year was placed at $496.3 billion in March 2023, up $1.1 billion from its level at the end of March 2022.

The external debt-to-GDP ratio fell to 18.9% at end-March 2023 from 20.0% at end-March 2022. Moderation in this ratio bodes well for mitigating external risks and adverse spillover effects. global markets, according to the latest RBI Financial Stability Report. .

The share of short-term debt with an original maturity of one year or less in total external debt rose to 20.6% from 19.7% the previous year. Similarly, the ratio of short-term debt (original maturity) to foreign exchange reserves increased to 22.2% in March 2023, from 20.0% the previous year.

Short-term debt by residual maturity—debt securities that include long-term debt by original maturity maturing within the next twelve months and short-term debt by original maturity—accounted for 43. 9% of total external debt at the end of March 2023 (43.2% at the end of March 2022) and amounted to 47.4% of foreign exchange reserves (44.0% at the end of March 2022). Debt denominated in US dollars remained the main component of India’s external debt, with a share of 54.6% at the end of March 2023, followed by debt denominated in Indian rupee (29.8%), in SDRs (6.1%), in yen (5.7%) and in euros (3.2%).


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