Rupee vs Dollar: Historic Downslide to Cost India Rs 68,500 Crore More While Repaying Foreign Debts
India's total short-term debt obligations totalled around $217.6 billion in 2017. 50 per cent of the debt is assumed to have been paid back in the first half of 2018, when the rupee averaged at 65.1 per US dollar.
New Delhi, Sept 7: As the Indian rupee touches a historic low against the US dollar, the State Bank of India (SBI) issued a note of warning, claiming that the exchequer will have to bear an additional burden of Rs 68,500 crore while repaying the short-term overseas loans.
India's total short-term debt obligations totalled around $217.6 billion in 2017. 50 per cent of the debt is assumed to have been paid back in the first half of 2018, when the rupee averaged at 65.1 per US dollar.
The remaining half, if calculated at an average exchange rate of 65.1 per dollar, would amount to Rs 7.1 lakh crore. However, since the rupee has depreciated by nearly 11 per cent in the past three months, the amount of unpaid foreign loans has jumped to Rs Rs 7.8 lakh crore, thus causing an additional burden of nearly Rs 70,000 crore on the exchequer.
"For the second half of the year, assuming that rupee depreciates to an average value of 71.4 per dollar, the debt repayment amount would be Rs 7.8 lakh crore," said the note written by SBI's Chief Economic Adviser Soumya Kanti Ghosh.
Apart from escalating the debt burden, India's oil bill could also witness an unprecedented surge by the year-end if the rupee ends up averaging at 73 per dollar, while the crude oil rate averages at $76 per barrel. Ghosh said this combination of rupee and crude oil values will end up raising the oil bill by Rs 45,700 crores.
(The above story first appeared on LatestLY on Sep 07, 2018 05:02 PM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).