India to prepay $2.9 bn external debt in current fiscal

Thursday, 18 September 2003, 19:30 IST
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NEW DELHI: India will prepay external debt of $2.9 billion by the end of the current fiscal in March as part of moves to reduce the interest burden and rein in the fiscal deficit, a senior finance ministry official said Wednesday. The government will prepay $1.4 billion worth of debt to multilateral agencies and $1.5 billion towards bilateral debt, said D. Swarup, additional secretary in the finance ministry. "The timing for the prepayment is being looked into. A final decision on this would be taken after consultations with the RBI (Reserve Bank of India)," Swarup said at a press conference here. The government prepaid $2.8 billion of external debt during the financial year ended March 31, 2003. Enthused by the country's strong forex reserves, India has decided to curb excessive borrowing and prepay all outstanding loans. The country paid back all its International Monetary Fund loans by 2000. New Delhi has also prepaid loans aggregating $1.67 billion to World Bank and another $1.3 billion to the Asian Development Bank in the last financial year. India's foreign exchange reserves touched a record high at $87.36 billion in the week to September 5, according to the Reserve Bank of India. The reserves have risen rapidly in the last few years on strong inflows from overseas and rising portfolio investment.
Source: IANS