Good News! India's External Assets Grew Faster Than Liabilities, Says RBI Report

Mumbai: India's external assets grew faster than its liabilities between June 2023 and June 2024, according to latest report from Reserve Bank of India ( RBI ).

report, which provides details on India's International Investment Position (IIP) as of end of June 2024, revealed that India's external assets increased by USD 108.4 billion over year, while external liabilities rose by USD 97.7 billion.

It said "During period between end-June 2023 and end-June 2024, external assets increased by USD 108.4 billion and external liabilities increased by USD 97.7 billion".

Despite this growth in assets, India's net IIP, which reflects difference between external assets and liabilities, remained negative at USD 368.3 billion at end of June 2024.

This marks an improvement compared to net IIP of USD -379.0 billion at end of June 2023, indicating a narrowing of gap as external assets have grown at a faster pace than liabilities.

It said " net IIP as at end-June 2024 was negative at USD 368.3 billion".

RBI report also provided insights into composition of India's foreign currency assets (FCA), which are part of country's external reserves.

se assets are diversified across multi-currencies and multi-asset portfolios in line with international best practices. A major portion, USD 515.30 billion or 83.51 per cent of FCA, was invested in securities, supporting stability and long-term growth.

In dition, USD 60.11 billion, or 9.74 per cent of FCA, was held in deposits with or central banks and Bank for International Settlements (BIS).

report said "As at end-September 2024, out of total FCA of USD 617.07 billion, USD 515.30 billion was invested in securities, USD 60.11 billion was deposited with or central banks".
This allocation helps maintain liquidity and acts as a reliable reserve for India's foreign exchange needs.

Overall, report highlights a positive trend in India's external financial position, as assets grow at a faster rate than liabilities, reducing negative net IIP year-on-year.   

(Except for heline, this story has not been edited by Republic and is published from a syndicated feed.)