Overseas financial assets of Indian residents declined by USD 43.9 billion during July-September 2022 due to a reduction in reserves assets, even as trade credit, currency and deposits, and overseas direct investment recorded an increase, said Reserve Bank of India (RBI) in its India’s International Investment Position (IIP), September 2022 report released on Friday. The reduction in non-residents’ financial assets in India was relatively lower at USD 9.6 billion.
According to the report, net claims of non-residents in India increased by USD 34.3 billion during the second quarter (Q2) of 2022-23 and stood at USD 389.6 billion in September 2022.
The reserve assets remained the dominant component at 62.9 percent share in India’s international financial assets. It had declined by USD 56.5 billion during July-September 2022, where valuation losses accounted for a major part.
The fall in India’s foreign liabilities during Q2 of 2022-23 was attributed primarily to direct investment (net) outflows, portfolio, and other investments also recorded a marginal decline on a net basis, barring trade credit which increased by USD 5.1 billion. Variations in the exchange rate of the rupee vis-a-vis other currencies also impacted the change in liabilities, when valued in US dollar terms, it said further.
Debt and non-debt liabilities continued to have an equal share in total external liabilities. The ratio of international assets to international liabilities moderated to 68.5 percent in September 2022 from 71.5 percent a quarter ago. (ANI)
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