Economic Survey: India’s foreign exchange reserves comfortable, external debt is low

New Delhi [India], January 31 (ANI): India’s foreign exchange reserves are comfortable and external debt is low, according to the Economic Survey released by the government on Tuesday. The Survey also said India has the potential growth positive space as far as the external debt level is concerned.

The Survey said India’s foreign exchange reserves stood at USD 532.7 billion as of September-end of 2022, covering 8.8 months of imports. “The reserves augmented to USD 562.7 billion as of December-end of 2022 covering 9.3 months of imports,” it said. According to Economic Survey, the country’s foreign exchange reserves was USD 577 billion during April-December 2020 while it was USD 607 billion during April-December 2021 while it was USD 563 billion during April-December 2022.

As of November-end of 2022, the Survey added India was the sixth largest foreign exchange reserves holder in the world according to data compiled by the IMF. “The import coverage of foreign currency reserves has declined since the pre-pandemic levels in most emerging market economies; however, that of India has increased from 95 per cent in Q4 2019 to 96.5 per cent in Q3 2022,” the Survey said.

According to the document, India’s external debt, at USD 610.5 billion as of September-end 2022, grew by 1.3 per cent (USD 7.6 billion) over USD 602.9 billion as of September-end of 2021. However, external debt as a ratio to gross domestic product (GDP) fell to 19.2 per cent as of September-end of 2022 from 20.3 per cent a year ago.

The Survey documents that the optimal threshold for India’s external debt is around 23-24 per cent of GDP. “Thus, India has the potential growth positive space as far as the external debt level is concerned,” it added.

It said “While testifying to the prudent management of India’s external debt, this contrasts with the external debt distress unfolding in many peer countries, post-Covid.”

According to the Survey, the long-term debt was lower at USD 478.7 billion as of September-end of 2022 than USD 498.1 billion a year ago with the share of long-term debt falling to 78.4 per cent from 82.8 per cent during the same period.
India’s foreign exchange reserves rose by whopping USD 1.727 billion to USD 573.727 billion in the week ending on January 20, according to Reserve Bank of India data.
The reserves hit about six-month highs with the latest two consecutive weeks’ rise, the RBI’s Weekly Statistical Supplement Bulletin said.

During the week that ended on January 13, the reserves rose by whopping USD 10.417 billion to USD 572.0 billion, earlier data showed.

According to RBI’s latest data, India’s foreign currency assets, the biggest component of the forex reserves, rose by USD 839 million to USD 506.358 billion. (ANI)