Home » Latest Headlines » The perfect recipe for an external debt crisis

The perfect recipe for an external debt crisis

Share with your friends










Submit
Views
310

The new numbers on the balance of payments released by the Reserve Bank of India (RBI) reveal the country’s unhealthy appetite for external debt.

 

According to RBI, India’s external debt stock at the end of March this year was $390.04 billion—an increase of $44.6 billion. In the normal course, for an economy of $1.8 trillion, this is well within the tolerance limits for now. The operative phrase is ‘for now’.

 

For one, this debt stock is effectively an understatement. According to RBI, the valuation gain, arising due to the depreciation of the rupee and other currencies against the dollar, pared the value of the debt stock by $55.8 billion. In other words, the effective debt stock is the rupee equivalent of $400 billion. Read More

Leave a Reply

Your email address will not be published. Required fields are marked *

*