National debt : Pakistan vs India

[Alpha BeeTee]

Ok guys I just came across some facts about national debts of Pakistan and India.
Frankly I have no idea what these figures mean for the economic future of both countries.
How will Pakistan and Ind ever get rid of so much debt ??

 

[Matrixx]

End-March external debt at $475.8 billion, says Reserve Bank of India - The Economic Times

 

[Georgeclark]

End-March external debt at $475.8 billion, says Reserve Bank of India - The Economic Times

Was just updating the figures and you did it

 

[Spectre]

Doesn't matter. What's important is that we have revenue streams available to service the interest component of debt.

India has more than enough tax collection to completely take care of debt servicing. Infact this debt is set to rise exponentially as we invest more on infrastructure.

Though i agree some of the foreign borrowing buy companies like Adani, Sahara, Essar etc are shoddy.

 

[IND151]

Was just updating the figures and you did it

Good news is our Foreign Exchange Reserves are rising too.

Hope it crossess mark of 500 billion Dollars and eventually 1 trillion dollars.

 

[Matrixx]

India has 350 B reserve as well

 

[IND151]

India has 350 B reserve as well

And it is rising

 

[Spectre]

Please understand reserves are not there for debt servicing. They are primarily there for money market operations by RBI to control wild fluctuations in exchange rate.

Debt is serviced from tax revenues

 

[21 Dec 2012]

tax revenues

Which are in Rupee and apart from Bhutan and Nepal, nobody accepts INR. External debt will be paid in USD.

 

[Georgeclark]

Good news is our Foreign Exchange Reserves are rising too.

Hope it crossess mark of 500 billion Dollars and eventually 1 trillion dollars.

Indian Exports are at $550 Billion + as of now (Consider it 600) and Foreign reserves are swelling, $650 Billion worth of retail market, you can expect a good time ahead.

 

[Spectre]

Which are in Rupee and apart from Bhutan and Nepal, nobody accepts INR. External debt will be paid in USD.

So? RBI will sell rupees and buy dollars. That's how the system works.

If you observe the money markets then you must know Dollar increases in vaue mostly at month ends and beginnings this is because RBI and Indian companies are buying dollars and selling rupees to pay back the interest and oil bills.

Reserves are sacrosanct like family jewels not to be used casually. In case of economic attacks which you guys are probably not aware of but they happen quite a lot where countries stockpile rupees and then sell them at one go so that rupee crashes in value, RBI needs those reserves to stabilize the currency by buying those rupees and selling dollars.

Reserves should never be used to fund spending like China does.

 

[Georgeclark]

So? RBI will sell rupees and buy dollars. That's how the system works.





Indian companies are buying dollars and selling rupees.

.

You got it right

 

[Spectre]

Indian Exports are at $550 Billion + as of now (Consider it 600) and Foreign reserves are swelling, $650 Billion worth of retail market, you can expect a good time ahead.

That's why this Make in India is so crucial for us. China frequently uses its huge reserves to keep the Renminbi (official currency) depressed so that its exports are competitive.

For India it is tougher to do so as we have comparatively lower reserves which we use only in case of too much variance.

Increasing exports will allow RBI and GOI some comfort to deal with coming monetary easing by USA which is expected to put a major strain on Indian Rupees and Stock Market as investors would cash out.

 

[21 Dec 2012]

So? RBI will sell rupees and buy dollars. That's how the system works.

So? How did RBI not 'service external debt through forex'?

 

[Georgeclark]

That's why this Make in India is so crucial for us. China frequently uses its huge reserves to keep the Renminbi (official currency) depressed so that its exports are competitive.

For India it is tougher to do so as we have comparatively lower reserves which we use only in case of too much variance.

Increasing exports will allow RBI and GOI some comfort to deal with coming monetary easing by USA which is expected to put a major strain on Indian Rupees and Stock Market as investors would cash out.

Raghuram Rajan is a Smart guy, he knows how to handle deflect and has saved Rs in his tenure. The line which I Bolded, is right on point by you.