Non-Residents' Net Claims on India Surge by $11 Billion in Q3 FY25: RBI
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Synopsis
Net claims of non-residents on India surged by $11 billion during Q3 FY25, reaching $364.5 billion by December 2024, according to RBI's IIP data. The country's foreign assets saw a decline, impacting its net foreign liabilities.
Key Takeaways
- Net claims of non-residents rose by $11 billion.
- Indian residents’ foreign assets decreased by $40.1 billion.
- Reserve assets increased by $13.2 billion.
- Debt liabilities in total external liabilities rose to 53.6 percent.
- New liquidity limit for SPDs set at Rs 15,000 crore.
New Delhi, March 28 (NationPress) Net claims of non-residents on India rose by $11 billion in the third quarter (Q3) of FY25, reaching $364.5 billion by December 2024, as indicated by the Reserve Bank of India's (RBI) International Investment Position (IIP) data published on Friday.
The foreign assets of Indian residents decreased by $40.1 billion, while claims from non-residents in India dropped by $29.1 billion, leading to an increase in India's net foreign liabilities.
The decline in foreign assets of Indian residents from October to December 2024 was primarily attributed to a decrease of $70.1 billion in reserve assets, according to the Central Bank.
Nonetheless, reserve assets saw an increase of $13.2 billion compared to December 2023.
The RBI noted, "The reduction in India's foreign liabilities stemmed from a decrease in inward direct and portfolio investments during the quarter; however, increases were seen in trade credits, loans, and currency deposits."
In December 2024, reserve assets comprised 59.0 percent of India's total international financial assets.
According to the RBI, "Fluctuations in the exchange rate of the rupee against other currencies influenced the changes in liabilities when assessed in US dollar terms."
The ratio of India's international assets to international liabilities improved to 74.7 percent in December 2024, up from 73.1 percent a year earlier.
The proportion of debt liabilities in total external liabilities increased to 53.6 percent in December 2024, compared to 52.9 percent in the previous quarter and 51.2 percent one year ago, as per the RBI.
Meanwhile, in light of current and evolving liquidity conditions, the Reserve Bank has opted to boost the aggregate limit available to the Standalone Primary Dealers (SPDs) under the Standing Liquidity Facility at the current repo rate, raising it from Rs 10,000 crore to Rs 15,000 crore, effective April 2, 2025.
The RBI added, "The revised limit for individual SPDs will be communicated separately. All other conditions of the facility will remain unchanged."
