RBI monetary policy | External commercial borrowings to be met comfortably: RBI governor

RBI Governor Shaktikanta Das, after announcing the status quo on key rates and policy stance on Friday, December 8, highlighted the broader economic situation.

Giving a brief on the external sector, Shaktikanta Das said they were confident of meeting their external financial requirements or external commercial borrowings (ECB) comfortably.

The statement by the governor read that on the financing side, foreign portfolio investment (FPI) flows have seen a significant turnaround in 2023–24, with net FPI inflows of US$ 24.9 billion (up to December 6) as against net outflows in the preceding two years. Net foreign direct investment (FDI), on the other hand, moderated to US$ 10.4 billion in April–October 2023 from US$ 20.8 billion a year ago.

“Net inflows under external commercial borrowings (ECBs) and non-resident deposit accounts are much higher than last year,” the statement added.

India’s external vulnerability indicators exhibit higher resilience in comparison with emerging market economy (EME) peers as well as since the taper tantrum period. India’s foreign exchange reserves stood at $604 billion as of December 1, 2023.