Indian residents' financial assets abroad decreased by $3.3 billion to $488.5 billion at the end of September quarter, RBI data showed on Wednesday. At the end of June quarter, this figure stood at $346.9 billion.
Data also showed that foreign owned assets in India increased by $3.5 billion over the previous quarter to $842.1 billion due to rise in FDI and portfolio investment in the country. "Indian residents' financial assets abroad stood at $488.5 billion as at end-September 2014 showing a decrease of $3.3 billion over the previous quarter mainly due to a decrease of $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 $6.8 billion over previous quarter to $353.7 billion during September quarter.
"This change in the net position reflected a $3.5 billion increase in the value of foreign-owned assets in India over $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 $3.5 billion from previous quarter to $842.1 billion. This was on account of increase of $1.9 billion in direct investment and $0.9 billion in portfolio investment in India.
On the liability side, currency and deposits increased by $2.5 billion and loans (mainly external commercial borrowings) decreased by $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 $6.7 billion (net) during July-September 2014, outstanding liabilities declined by $2.9 billion, from $386.4 billion in June 2014, as a result of rupee depreciation during the period, RBI added.