Friday, July 25, 2003
India to continue prepaying foreign debt: Jaswant
Reuters New Delhi, July 25
Finance Minister Jaswant Singh said on Friday the Government would continue to pay high interest external debt ahead of schedule.
The Government prepaid $2.8 billion worth of multilateral debt in the financial year ended March 2003 using its record foreign exchange reserves, the first time it paid external debt of this size ahead of schedule.
"Our commitment to repay high interest-bearing debt earlier than schedule remains. Despite the repayment that was advanced, not a flutter was felt in the flow of foreign exchange or total reserves or the rupee rate," Singh said in Parliament.
He did not give details on the amount or the timing of the payment of the foreign debt ahead of schedule.
The Government used the Reserve Bank of India's forex reserves to repay loans taken from the Asian Development Bank and the World Bank and then paid the RBI in rupees borrowed locally, taking advantage of low domestic interest rates.
India's key bank rate, at which the RBI lends overnight funds, is at a three-decade low of six per cent.
India is sitting on a huge pile of forex reserves, totalling $83.25 billion in the week ended July 11, boosted by robust remittances from expatriate Indians, trade and foreign investment.
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