IIP deteriorates on rise in external liabilities in Q2: RBI

Written by PTI | Mumbai | Updated: Mar 29 2014, 00:43am hrs
RBIThe net claims of non-residents on the country, as reflected in the net IIP, increased by USD 17.7 billion to USD 317.2 billion at the end of December 2013. Reuters
The net international investment position (IIP) or the difference between the nation's external financial assets and liabilities, deteriorated on the back of rise in the value of foreign-owned assets in the country, according to the RBI data.

The net claims of non-residents on the country, as reflected in the net IIP, increased by USD 17.7 billion to USD 317.2 billion at the end of December 2013, the Reserve Bank said in a report released today.

"This change in the net position reflected an increase of USD 39.9 billion in the value of foreign-owned assets in India vis-a-vis an increase of USD 22.2 billion in the value of Indian residents' financial assets abroad," it said.

The foreign-owned assets in India increased mainly due to increase of USD 23.6 billion in currency and deposits component of other investment, it said.

Direct investment in India and portfolio investment in India also increased by USD 8.6 billion and USD 5.6 billion, respectively, it added.

Assets of Indian residents abroad stood at USD 458.9 billion as at third quarter recording an increase of USD 22.2 billion over previous quarter mainly due to increase of USD 16.7 billion in reserve assets and increase of USD 5.8 billion in other investment abroad, mainly trade credit and currency and deposits.

Direct investment abroad observed marginal decline of USD 0.3 billion, it added.

Variation in exchange rate of rupee vis-a-vis other currencies affected change in liabilities, when valued in US dollar terms, it said.

Equity liabilities in US dollar terms increased by USD 16.3 billion, due to the stock valuation effect resulting from rupee appreciation, while net inflow was USD 11.5 billion during the period, it added.