Indian residents’ financial assets abroad fall by $3.3 bn to $488.5 bn in September quarter: RBI

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Mumbai | Updated: January 01, 2015 12:26 PM

Foreign owned assets in India increased by $3.5 bn to $842.1 bn due to rise in FDI and portfolio investment in the country.

Indian assets, Indian residents, India assets abroadIndian residents’ financial assets abroad stood at USD 488.5 billion as at end-September 2014. (Reuters)

Indian residents’ financial assets abroad decreased by USD 3.3 billion to USD 488.5 billion during the July-September quarter, RBI data showed today. The figure stood at USD 491.8 billion (rpt) 491.8 billion at the end of June quarter.

Data also showed that foreign owned assets in India increased by USD 3.5 billion over the previous quarter to USD 842.1 billion due to rise in FDI and portfolio investment in the country.

“Indian residents’ financial assets abroad stood at USD 488.5 billion as at end-September 2014 showing a decrease of USD 3.3 billion over the previous quarter mainly due to a decrease of USD 2.3 billion in reserve assets,” RBI said.

The difference between an economy’s external financial assets and liabilities is an important indicator to understand external sustainability and vulnerability of a country.

Net claims of non-residents on India increased by USD 6.8 billion over previous quarter to USD 353.7 billion during September quarter.

“This change in the net position reflected a USD 3.5 billion increase in the value of foreign-owned assets in India over USD 3.3 billion decrease in the value of Indian residents’ financial assets abroad,” RBI said.

Among others, the foreign-owned assets in India increased by USD 3.5 billion from previous quarter to USD 842.1 billion. This was on account of increase of USD 1.9 billion in direct investment and USD 0.9 billion in portfolio investment in India.

On the liability side, currency and deposits increased by USD 2.5 billion and loans (mainly external commercial borrowings) decreased by USD 0.9 billion.

As per the data, reserve assets had dominant share of 64.2 per cent in country’s international financial assets during the period, followed by direct investment abroad at 26.5 per cent.

Explaining effects of currency movement, RBI said variation in exchange rate of rupee over other currencies affected change in liabilities, when valued in US dollar terms.

Even as there was equity inflow of USD 6.7 billion (net) during July-September 2014, outstanding liabilities declined by USD 2.9 billion, from USD 386.4 billion in June 2014, as a result of rupee depreciation during the period, RBI added.

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